October Real Estate Roundup: Pre-approved Means More Than Pre-qualified

As you know, there’s been a lot of recent positive news about the real estate market. Interest rates have been inching downward, and the Fed cut its base rate (which is not a mortgage rate but makes consumer borrowing more accessible), with potentially another cut coming this year.  

So as more homebuyers reach out to you, I wanted to remind you of a few helpful tips to make sure their financing is really solid, especially in light of the recent NAR settlement.

The News on Commissions 

First, on almost all loans now, we now require a copy of the fully executed buyer/broker agreement confirming the commission, even if the purchase contract states the amount. (Got questions? Just ask me.) 

Second, it’s best for your buyers to have a pre-approval before they shop, not just a pre-qualification. These terms are commonly used interchangeably, so it’s understandable your excited buyers might get pre-qualified and want to immediately start house hunting.  

Why Pre-Approval Means More 

But there’s a big difference and it matters to you, too. For example, if your buyers will be paying out-of-pocket for agent commissions, you’ll want to know they have the funds to cover them. 

Also, your time is valuable. You don’t want to start visiting open houses, or draw up an offer, only to find out your buyers don’t qualify for that loan amount after all. 

Pre-approval means your buyer has provided me their documents (W2, bank statements, etc.) and had their credit pulled. In fact, Atlantic Bay “upfront underwrites” all our loans, so you and your buyers know on the front end what they qualify for, instead of waiting first on processing. 

Pre-qualified means they’ve simply talked to me and received a rough estimate of what they can afford without any documentation or hard credit pull. 

Pre-approval means your buyers know exactly how much they can afford before they start shopping. Other benefits include:  

• Your buyers will stand out over the competition because their financing has already been verified. 

• It’s the next best thing to a cash offer, elevating your offer in a multi-buyer scenario. 

• Everyone will enjoy a smoother closing. 

Approval Without an Address 

Finally, maybe your clients don’t have a property in mind yet. Our Fast Track Buyer Advantage program offers conditional approval without a signed purchase contract or property address. 

Pre-approvals are typically good for 120 days, but if the home search process takes a little longer than expected, just reach out. With a little extra documentation, we can extend it.

I’m always here to help, just reach out!