When Pre-qualification Isn’t Enough: How To Present A Strong Offer In Seattle's Market

Secure Your Home In A Bidding War With A Quick Close

Many buyers, from those purchasing their first home to investors seeking to add to their portfolio, enjoy figuring out which neighborhood is the best fit and exploring listed properties. But unless you come prepared with the right financing, getting into the most desirable parts of town can prove difficult – especially in Greater Seattle.

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Understanding the home loan approval process is often the least exciting part of buying a new home, but it’s crucial to securing the keys to your dream property. Most buyers understand they need some proof of their financial status in order to make an offer, however many don’t understand the difference between what is often referred to as a “pre-approval” or “pre-qualification”, and pre-underwritten approval, even as the number of sellers requiring pre-approval continues to increase.

Securing a pre-approval or pre-qualification for a mortgage from your lender only requires a basic credit check and review of your income and assets. The fully underwritten process, however, involves a more in-depth look at your finances, verified by the bank’s underwriter, which produces a more accurate estimate of the amount you can afford to spend on a home and comes with the lender’s decision that you’re qualified to borrow that amount, assuming nothing about your financial picture changes between the time of underwriting and loan closing. 

Here are three reasons why getting pre-underwritten by your lender will reduce the stress of the buying process and make your offer more likely to get accepted.

Reduce the Risk of Failed Financing

Failed financing is on the rise as 6.3% of sales of all listed properties in the top 100 metros failed to close in 2016, up from 3.4% just one year before. With a pre-underwritten approval, your lender can provide a more accurate estimate of how much you can spend on a property, which in turn reduces the risk that your loan will fall through. This is especially important if you’re self-employed, have fluctuating levels of income, or are funding your home purchase in a complex way.

Speed up the Process

Pre-underwritten approval means that by the time you’re under contract, about fifty percent of the work needed to finish your financing is already complete. This could mean offering a 15-day closing instead of the traditional 30 days, which will likely appeal to motivated sellers.

Present a Stronger Offer

Both pre-qualification and pre-approval letters show that you’re a highly interested buyer, but getting a pre-underwritten approval shows that you went the extra mile to demonstrate your financial status and commitment to buy. When you’re looking to purchase property in a competitive market, going that extra step could mean the difference between getting your offer accepted and continuing to spend your weekends going from open house to open house.

In a market where 25% of home sales in Seattle as of 2014 didn’t make it to closing, taking the extra steps to gain a pre-underwritten approval from your lender is key to ensuring that you end up with the property of your dreams!

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