The power of pre-approval in the Albuquerque Real Estate Market

The power of pre-approval in the Albuquerque Real Estate Market

(Transcript Snippet): “Tego: So I wanted to jump over to this whole conversation about being a buyer in today’s real estate market in Albuquerque, and this whole idea of getting pre-approved or pre-qualified I know those terms get used interchangeably, but the, the term we’ve been using, and the thing we’ve been saying lately is the power of the pre-approval. And what is that? And why is it so important for folks

Tracy:

Is very different from pre qualified? Yes. Pre-Approval means you’re approved. We’ve checked your credit, we’ve checked your employment. We’ve looked at your taxes. We’re very confident that unless something changes and you go buy a truck and a new appliances or something, and open a bunch of credit, that you’re a very, very strong borrower.

Tego:

You lose your job. That’s your job. Yeah. So, the whole idea of this, the power of the pre-approval is it gives well, it not only for when you’re, when you’re making a offer, obviously when you’re making an offer, you need to have that to show that you are a qualified buyer for that property, because when we’re getting homes where you have 20 offers, and that is not an exaggeration, we are getting, you know, 20 offers on homes. When they come on the market right now, it shows that you’re ready to go, right.

Tracy:

Makes you much closer to a cash buyer than a pre qualifier qualifying.

Tego:

Talk about what the differences between lenders Tracy and, and how important that is.

Tracy:

Sure. So last weekend, you know, Tego, I spent most of the weekend fielding calls, texts, emails about a house that I had put on the market. And it was a hot property obviously. And in the end, we ended up with 21 offers to sift through and, you know, the it’s, it was interesting. And I kept saying that to you, I kept saying, Tego, look at this and see how they compare it to see this offer versus that offer and how they structured it. And honestly, the, there were a couple of cash offers, but there were a couple financed offers that were exceptionally strong, where the terms that they had offered in addition to financing made sense. They were waiving appraisals, they were waving inspections, or they were paying for things that maybe a seller sometimes pays for in our market. They were really tipping it in their favor. Sure. So, so the ones that were pre-approved from a local trusted lender versus ones where a lender letter came in and it said you’re pre-qualified. And once we check your credit and your stuff and subject to and subject to, then we will feel more confident. It says, this is not to be used for anything basically. And, and the ones that were from that were pre pre qualified, not pre-approved and from a lender I’d never heard of, or from an out-of-state lender, they just didn’t have the weight of a good local, trusted lender.

Tego:

It has a reputation in Albuquerque that also has a reputation to protect and wants to make sure that they’re doing the right thing for our community. And there’s a bunch of those. No doubt about it. Yeah.

Tracy:

So just to say, what does that mean? Right. A reputation to protect. So the realtor community has a lot of pull in, you know, the buyers call and they say, yeah, who do you suggest, you know, for the loan? And you’re going to pull out a couple of names and say, these are the ones that have closed on time, have had good communication, have great rates. And what they charged to do, the loan is fair and reasonable. And those are, you know, those are the ones when we get a lender, even local who has dropped the ball a few times, or in the end has to say, my client can’t buy the house anymore. They don’t qualify. We go, well, how could we get three weeks in? And they don’t qualify. And they go, well, we just pulled credit. We just checked their employment history. We just found out that their co-signer on this other loan or, you know, it stuff. And then when that happens, more than once you, you remember those things, everyone has issues come up. Yeah. Local lenders have issues come up and it’s oftentimes not there in their realm to affect it’s whatever the borrower did that didn’t disclose properly upfront. Right. Or they changed jobs or something changed with the borrower, but obviously a good local lender with a reputation for doing the right thing and getting it done is going to help an offer.

Tego:

Tracy, what are the factors that, that they look at when they’re doing a pre-approval

Tracy:

Pre-Approval? So typically they are going to look at their income, their debt, their assets, their credit history, their employment, and then deliver length of employment. So if they recently switched career fields, maybe a different job, but not in the same field, that can be very important. And so all of those things are really important income and assets, right. They’re going to look to make sure that somebody can afford to make the payment on the house. Long-Term they’re going to check, they’re going to ask the employer, whether they have employer answers or not, but they’re going to ask the employer, if there’s anything that looks like it’s on the horizon, is this job stable? Is this person going to be there?

Tego:

Yeah. And I’ve filled those out for, for people that work for us. And yeah. I mean, it’s, they want to know. Right. And they check and double-check and just the last thing on this subject is it’s not just so that you show that you’re a strong buyer. You then know, you know, what your purchasing power is, what your monthly payments are going to be. You know, so, so it really gives you clarity on determining and determining what you should be looking at.

Tracy:

Absolutely. And so a lot of times Tego, we talk to a client and we say, well, what kind of price range are you looking in? And really the better answer is what’s your monthly payment comfort, because most people know how much they’re paying right now, how much their rent might be, or how much their current house is and how much more they could do if they want to step up that and still feel comfortable and confident that that house isn’t going to be more than they’re ready to take on. So getting pre-approved does all that. And it gives you that confidence that you know, that when that house comes on and you have to maybe stretch yourself to a price a little bit higher than maybe what you wanted, you can move forward, confidently and know that it’s still in reach.