My #1 Homebuying Tip for BEFORE You Make an Offer
Today, I’m going to share one of the most – if not THE most – powerful homebuying secrets I know.
You see, thousands and thousands of people approach homebuying the WRONG way.
They wait until the last minute to figure out how this whole “homebuying thing” works.
When in reality, it takes a little bit of preparation and know-how to swiftly navigate the process.
Luckily, we’ve got your back.
With the homebuying secret I’ll show you today, you’ll learn how to beat “Big Real Estate…”
And save a boatload of cash in the process.
You could end up saving $1,000s…in addition to avoiding your typical “hidden homebuying landmines” that cost you time, money and heartache.
Let me explain…
ERROR: Thousands of Americans Do This When They Buy a Home
I recently heard an alarming story about a couple that made a HUGE mistake…
Mark and Suzanne Hoffman have two young children, Hunter and Eliza, so they decided to buy a home in a great school district.
The Hoffmans are eager to start making offers on homes.
After all, the market is hot.
And if they don’t move fast, they risk missing out on their dream home.
So to start making offers, they’re encouraged by their real estate agent to get “prequalified” with the bank.
The prequalification process takes only 15 minutes.
It’s a surprisingly painless process that requires very little documentation.
The Hoffmans take their letter of prequalification and make an offer on a house they love.
And to their surprise…their offer is accepted!
A closing date is set a month from now.
At closing, the Hoffmans will sign some legal documents saying they are the new rightful owner of the house.
Avoid This Hidden Homebuying Landmine…
But now the clock is ticking.
The Hoffmans have thirty days to get all the required paperwork to their bank.
In between work… the kid’s soccer practice… and preparing to move… signing and finding mortgage documents is like a full-blown second job.
Not to mention they have to start paying for third-party services.
- They pay for an appraisal out of pocket.
- They pay for an inspection out of pocket.
- And because the property uses a private well, they pay for a septic walkover, too.
All in all, this is about $1,000 out of pocket.
Meanwhile, their loan is being processed.
And at the tail end of the process, their loan enters the “underwriting milestone.”
The “underwriting milestone” is where an underwriter makes a final assessment about the house-hunter’s “borrow-worthiness.”
But unfortunately, in the rush to issue a letter of prequalification, the bank’s loan officer initially miscalculated the overtime income of the Hoffmans (a common mistake).
Moreover, despite getting prequalified, the Hoffmans have a misreporting error on their credit report.
The error shows more debt than what is actually owed.
The end result is UGLY…
And after spending so much time and money on the homebuying process, the Hoffmans are shocked when their bank calls them before closing to say they’ve been denied.
Time, money and energy…down the drain.
The Tiny Change That Makes a World of Difference
All of this could’ve been easily avoided.
Instead of getting “prequalified” before buying a house.
You should get “preapproved.”
It makes a world of difference.
A “prequalification” is only a preliminarily assessment of your borrow-worthiness.
In other words, with a prequalification, you go through the underwriting process after you make an offer.
A preapproval requires the bank to fully underwrite your file before you go home shopping.
And a preapproved offer is a stronger offer than a prequalified one.
It’s stronger because preapproval communicates to the seller, “These borrowers have been given the green light to buy this house. There’s no guesswork involved. Nothing — like miscalculated overtime or credit errors — can come back to haunt them.”
So when you begin the homebuying process, be extra careful of the “blast off mortgage” claims you see on TV.
Because while every mortgage company wants to make their process seem as easy as possible, at the end of the day, all approved mortgages have to meet very strict guidelines.
And despite what any TV commercial says, meeting those guidelines for preapproval requires a lotta’ paperwork.
So when you begin shopping for a mortgage, find a bank that will underwrite your loan before you start making offers.
It’ll save you time, money, and allow you to make stronger offers than everyone else.
Truly, it’s my #1 homebuying “secret.” I hope you like it.
Here’s to growing and protecting your wealth!