There is no doubt that those words are a cause for celebration to any prospective homebuyer, but they are especially true when competing with other buyers in a hot market. There are many factors that you cannot control when competing against other buyers, but there is one thing that can give you the edge. Get a verified approval letter (VAL), a written offer that proves to sellers that your financing has been confirmed.
The process to get a VAL can be relatively simple, even at a time when purchasing a home is a daunting task. It’s easy to connect with an expert who will perform a thorough analysis of your credit score, debt, income, and employment status. You’ll then receive a Verified Loan Approval letter so you can shop in confidence. It’s also helpful to have a conversation with a Home Loan Expert.
I have personal experience of buying a house in a hot market for 2020. In a seller’s marketplace, we had to prepare more than when my husband and I bought our first home in a buyer market several years ago. She made it clear from our first meeting that being pre-approved might not be enough. She stressed that we should take extra steps to demonstrate to sellers that we are serious about buying a home, even before touring any homes. A VAL is a step above a preapproval letter. It shows that we are serious and ready to buy, even before touring a single home.
Unlike with a pre-qualification, getting a VAL requires pulling credit scores. However, we knew we’d have to take this step in our home buying process eventually, so the slight ding to our scores was a non-issue when compared to the benefits of the VAL. In a market where moving quickly is key, having these steps done ahead of time meant that there was no down time once we were ready to make an offer. With this pre-approval, we could show sellers, yes, we could afford homes up to a certain amount and, no, our financing wasn’t going to be an issue for closing.
I am grateful we took our agent’s advice to check this task off the list before looking at houses. We soon realized that houses would come and go in a single day in our market. If we found one we wanted, the last thing we needed to do was scramble to get a pre-approval letter. By getting a VAL in advance that is valid for 90 days, buyers can be confident they can be competitive when ready to make an offer.
At the same time, going through the pre-approval process helped us get a clearer picture of what we could afford. Although we couldn’t control the ever-changing mortgage rates and how that would affect our ultimate payments when we purchased a new home, we knew how much we would be approved to spend on a home. It also gave us a chance to assess our real comfort level with our budget, which led us to set our personal “max” below the pre-approval figure.
All the while, we were also preparing to sell our home—which, let me tell you, was a very different experience! In this position, we knew we could confidently expect a handful of competitive offers within days of listing our home. Again, our Realtor counseled us to take into account whether a potential buyer had a pre-approval letter. We knew that if we were looking at two side-by-side offers for the same amount, the buyer who came with a locked-and-loaded VAL would win out.
After practicing patience and having a bit of luck, we were able to confidently make an offer on a home that checked all of our boxes. Even in a hot market, that one offer was all it took: Our bid backed by a pre-approval was accepted!
Although our lender still needed to consider the home’s appraisal value, condition and title before giving us the official approval, we were glad to know our finances weren’t going to hold up the process. When we turned around to list our first house, we were thrilled to get a number of offers within the first few days—and ultimately went with a buyer who had a pre-approval letter.
I can say from experience that buying a house in a competitive real estate market is an exercise in coping with a lot of unknowns. From waiting for the right house to hoping the seller will accept your offer, learning how to take deep, calming breaths is a helpful skill to have. With a Verified Approval Letter, though, you don’t just have to cross your fingers and hope for the best—you can actually give yourself an advantage.
– Emily Glover
Are you thinking of buying? Our agents at Preferred Properties of Texas are here to help!
Original Blog: https://www.realtor.com/sponsored/verified-approval-letter/