The most common mistake we've observed among buyers in our competitive housing market is failing to go through the pre-approval process before finding their ideal home. The reality is, you never know when your dream house is going to hit the market, so you need to have your ducks in a row before you start touring homes.
While cash buyers can easily provide proof of funds, traditional loan applicants may face a 10-14 day pre-approval process (this is taking it a step further than the preliminary pre-qualification process). Waiting until you're ready to make an offer is simply too late to reach out to a lender. In our current market, with multiple offers being very much a part of our landscape, it is common to see buyers waiving financing contingencies, which is only possible for pre-approved buyers.
We wanted to share a cautionary tale: Last year, we met with some buyers who wanted to start the home buying process, but were not in any hurry. Though we encouraged this couple to go ahead and get preapproved early in the process, they didn't jump on it. They figured it would take a while for something that they liked to hit the market. To their surprise, the "it house" popped up within 3 weeks of our initial consultation. When we scheduled the showing, it was a revolving door of buyers in and out. Leaving the house, they said, "Let's write an offer!" and then they dropped the bomb on us that they still hadn't reached out to a lender yet. Turns out, the listing agent gave everyone 24 hours to put in a best and final offer, requesting a preapproval letter to accompany the offer. Even though we were able to get our lender to talk to the buyers later that night, they got overwhelmed with completing a loan application and gathering several financial documents they did not have easy access to. Sadly, they could not get their financing docs together quickly enough to feel comfortable moving forward with an offer.
After missing on this great listing, our clients got their ducks in a row on the financing front, and we were able to compete and win on another listing. However, it was almost 6 months later, in a more competitive buyer's market and higher interest rates.
Bottom line: don’t miss out on your dream home! Spend the time on the front end of your search process so you are teed up for success once the right house hits.
Message us anytime if you have any questions about the current buying environment in Atlanta.
