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Why Those Pre Approval Letters Are So Important

Posted on Friday, March 02, 2012

So our Naples real estate client tells us he is looking for a home to buy and will require financing. We ask him to seek pre-approval. These days pre-aprpovals  are a good idea. Why? The sellers may be discounting offers from buyers with financing contingencies more heavily than in the past and a financing client without pre approval may be at a disadvantage.
Let’s look at what is going on here. First the economic troubles of the past few years may make everyone a little mortgage shy, including sellers wondering if the buyer will really be able to land that mortgage. Secondly the seller, who may have waited months if not years to sell their home may not want to hold it off the market for a buyer waiting on finance approval. Also in these season cycling days in Naples real estate, end of season may be the last hooray until the fall to make that sale – so why take your property off the market for a buyer who may or may not find financing?  So it is is the buyers advantage to obtain a pre approved letter.
National news may be making sellers even more skittish.  From CNBC Realty Check today “… 22.8 percent, of all residential properties with a mortgage were in negative equity at the end of the fourth quarter of 2011, according to a new report from CoreLogic.” Ok, if you are seller reading this you may wonder if that buyer with the finance contingency offer and that home up north is really going to be successful in obtaining financing.
One more thought, the pre-approval process is easy in our experience. usually just a thirty minute conversation with a mortgage broker and shortly thereafter you should know. Do it. Pre approvals take one more objection off the table and in the end it might help the buyer know what he/she can really afford.

All the best this Friday morning everyone.

No legal, investment, or tax advice is being given in this Blog.  Consult with legal, financial and tax professionals before acting on any real estate transaction.  Actual real estate price and sales results are subject to market forces and are not completely predictable. The writings of this Blog are intended for the sole use of our clients.
Mark Goebel, PA is a REALTOR with Coldwell Banker on 5th avenue in Naples, Florida with 35+ years of visiting and living in Naples. After 25 years at Accenture, Mark retired as a managing director and spends his time helping non profits and building a Naples real estate team with his wife Nan. Talk to Mark and Nan about life in Naples and why they chose this place to live full-time over all others and enjoy Naples real estate.
Mark Goebel, PA
REALTOR Coldwell Banker 5th Avenue South
Mobile: 239.595.3921
Facebook: NaplesBestAddresses
Twitter @mcgoebel
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