First Step for Buyers: Get Pre-Approved!

What's the first question we get asked by buyers? Generally speaking, it is "Where do I start?"

These days, most buyers start the home buying process by browsing houses online. Whether it's Realtor.com, Zillow, Trulia, or similar, anyone with even a passing interest in real estate has spent time there. Why? Because it's fun! Who doesn't like scrolling through listings, browsing photos, and imagining how amazing life would be in this new house?

There's nothing inherently wrong with starting there, but it leaves out one big issue: budget. Money isn't always a fun topic to discuss. Unless you've done well for yourself or have a financial support system in place from your family, odds are you don't like thinking about the budget. Why ruin the fun of daydreaming by actually finding out the potentially painful reality of your financial standing?

As we'll explain below, getting pre-approved by a lender is the crucial first step that so many buyers overlook.

What does it mean to get pre-approved?

A pre-approval from a lender is essentially a promise that they can get you the loan you need. They will review a core set of financial documents like your tax returns, pay stubs, bank accounts, etc. and determine how much house you can afford.

Why is it important to get pre-approved?

One new reason to get a pre-approval letter is that during the pandemic, some homeowners are reluctant to even let a buyer tour their home without knowing that said buyer is financially qualified to purchase it.

Another reason is that once you find your dream house, you'll likely need to act quickly to secure it. This means writing an offer and proving to the seller that you can afford it.

Lastly, a pre-approval will save you time and energy because you will know what price range you need to focus on.

How do I get pre-approved?

You'll need to get connected with a lender (or two, or three). Here at the David Kim Group, we have a network of top local lenders who we work with regularly and can recommend. Contact us to start that process.

Extra Credit

Are you ready to go to the next level? Ask your lender about getting fully approved. This is the highest level of screening you can do before you choose which house you're going to write an offer on. Going the extra mile can set you apart from the pack in a competitive seller's market.

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That's all there is to it! It's really simple once you know what you're doing, but many buyers get intimidated before they start. Hopefully this post gives you the clarity you need to get the ball rolling!

- Devin Wong