How Pre-Approval Changes the Way Sellers Perceive Your Offer
If you’re buying a house, there’s no smarter move than getting mortgage pre-approval.
Except… Most buyers don’t do it.
They find the perfect house. Put in an offer. But then get outbid by someone else. Why? Because sellers look beyond price tags. They look at risk. And there’s nothing that lowers your risk in a seller’s eyes MORE than getting pre-approved.
Except…it matters MORE now than ever before because…
The Market Is Still Competitive
If you need to sell a house fast, sellers don’t have to wait around for a risky buyer to figure their financing out. They can just reject your offer and wait for the next one.
That’s why working with motivated Fort Worth property buyers (or understanding what they know) puts you at a serious advantage when it comes to making an offer.
Here’s What You’ll Learn:
- Pre-Approval in the Eyes of a Seller
- Negotiating With Pre-Approval
- Pre-Approval Allows for Faster Closing
- Life Without Pre-Approval
Pre-Approval in the Eyes of a Seller
Here’s what a lot of buyers don’t realize…
Sure, sellers want a great offer price. But they want something MORE than that.
When you show up to an offer WITHOUT a pre-approval letter, a seller is taking a gamble on your ability to pay. Will you actually get approved for a mortgage? Will your loan fall through at the last minute?
Sellers want assurance. They want a “sure thing.”
Pre-approval takes the uncertainty out of your offer.
As soon as a seller sees your pre-approval letter, they know:
- A lender has already verified your income
- They’ve analyzed your credit report
- Your debt to income is acceptable
- You’ve been pre-approved for a specific loan amount
Essentially, your offer goes from a “maybe” to a “likely.”
Studies show that 86% of sellers want buyers who come to them with a pre-approved mortgage.
So if you don’t have that pre-approval before you make an offer, you’re already behind the ball.
Mind. Blown.
Negotiating With Pre-Approval
Most people think negotiation is just about who can name the lowest price.
But here’s the thing.
Negotiation has nothing to do with price.
Negotiation is about LEVERAGE. And having a mortgage pre-approval gives you more leverage than the buyer sitting next to you.
When you’re pre-approved, sellers know you’re not bluffing. They know you can feasibly afford to buy their house as-is.
So when it comes time to negotiate home repairs, or closing costs, or the asking price… you’ve already proven to them that you’re qualified. That means they have more reason to work WITH you.
When you don’t have pre-approval, you’re starting from a position of weakness.
Yes, even if your offer is $10,000 higher than the next guy.
Sellers will always consider:
- What happens if your financing falls through at the last minute?
- Will your credit actually get approved?
- Are you hiding something about your income?
If a seller has ANY doubts about your ability to pay, they’ll want LESS risk. And that means they’ll hop on the next offer before yours.
Pre-Approval Allows for Faster Closing
Here’s the best part of walking into an offer with your ducks in a row:
Pre-approval allows you to close faster.
Why? Because motivated sellers who want to sell houses fast know that once you’re pre-approved for your mortgage, you’ve cut out weeks of waiting just to see if your loan will even work.
72% of homebuyers who apply for a mortgage end up closing with that same lender. That means your mortgage company is already acquainted with you. They’ve already been through most of the leg-work. Your closing timeline can (and likely will) be cut down significantly.
Now think about this…
The days of homes sitting on the market for weeks are LONG gone. These days, houses are going under contract in 24-48 hours.
If you make an offer and you’re NOT pre-approved, you’re instantly playing catch up.
Buyers who are pre-approved can make offers the SECOND they walk into a house. Buyers who aren’t pre-approved have to scramble to put their paperwork together. And by then… It’s too late. The home is gone.
Pre-approval isn’t just nice to have… these days, it’s REQUIRED if you want to be competitive.
Life Without Pre-Approval
TL;DR Pre-approval = Better Offers. Always.
Let’s cut right to the chase.
If you show up to an offer without a mortgage pre-approval, you’re gambling. And gambling rarely wins you the sale in a competitive market.
Here’s what happens when you DON’T have mortgage pre-approval before making an offer:
You show up to an offer. The seller (likely) has other offers on the table.
They look at YOUR offer… and notice you don’t have a pre-approval letter.
Your offer instantly looks like a HIGH RISK proposition to the seller.
Your real estate agent likely heads off to the side and lets the seller know that your offer is HIGH RISK. Your offer gets put at the bottom of the list. Possibly RIGHT at the bottom.
Sure, you can offer more money than the person next to you. But if you’re risking the chance that your financing doesn’t work out, sellers will choose the next highest offer that doesn’t have that risk.
Here’s the cold hard truth…
Sellers who want to sell houses fast do NOT want to waste their time. If your offer comes with uncertainty, chances are they’re going to reject it outright.
The Bottom Line
Pre-approval doesn’t guarantee your offer will get accepted.
But it does eliminate one of the top reasons an offer will get kicked to the curb.
Wrapping Up…
Pre-approval is one of the biggest advantages you can have when making an offer.
Not only does it put YOU in a better negotiating position, but it puts sellers’ minds at ease when they receive your offer.
Here are the biggest reasons you should get pre-approved before putting in your next offer:
- 86% of sellers want you to be pre-approved
- It shows sellers that you’re ready and able to buy as-is
- Sellers who want to sell house fast favor offers that can close quickly
- You can close faster when you’re pre-approved
- Offers without pre-approval look riskier to sellers
When it comes down to it… getting pre-approved before submitting an offer is par for the course. If you’re not doing it, you’re already behind.
