Home buyers who are planning to enter the real estate market can benefit from having their financing arranged ahead of time. What does that mean exactly, and why is it so important in the current real estate market? Here’s what you need to know.
Many real estate markets across the country are highly competitive right now due to a lack of supply. There are plenty of people in the market looking to buy a home, but there’s not enough inventory to go around. This supply and demand imbalance puts upward pressure on home prices and makes things more competitive for buyers.
Mike Fratantoni, chief economist for the Mortgage Bankers Association, recently cited this as one of the primary factors influencing the market right now. “The major constraint in the market right now is the lack of supply,” Fratantoni told CNBC. “The absolute number of units on the market is near an all-time record low.”
Competing in a Tight Real Estate Market
In a competitive real estate market, home buyers want to have every possible advantage going for them. Among other things, home buyers can benefit from having their financing lined up ahead of time, before they even start looking at houses.
This might mean one of two things, depending on your money situation:
Benefits of Mortgage Pre-Approval
Mortgage pre-approval is basically a kind of financial pre-screening process. This is where a bank or mortgage company reviews your current financial situation to determine (A) if you’re a good candidate for a home loan, and (B) how much you can borrow. This helps you, the buyer, in two ways:
Both of these things could give you a much-needed advantage in the marketplace. This is especially important in an active real estate market where homes are selling quickly, and where multiple offers are a common occurrence.
The current inventory situation across the country also underscores the importance of having professional help from an experienced real estate agent. An agent can help you find a property that meets your needs, evaluate the seller’s asking price, and make a strong offer in a timely fashion. This is the key to success in a competitive real estate market.
Are you ready to start the search for your new home? Contact me and let me help you!