David Saks: Strange ? You Don't Hear The Word "Pre-approval" Much Anymore ....I Wonder Why ?

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Strange ? You Don't Hear The Word "Pre-approval" Much Anymore ....I Wonder Why ?

What is pre-approval ?

Well, in short, it's a lender's practice of approving a borrower for a determined loan amount.

This in turn allows the buyer to search for a home with the confidence they need, along with the ability to share that information with the seller, and demonstrate that they're financially equipped to make an offer.

And that their loan will be approved.


Sam and Sally are looking for a new home in Yahoo City and they'll first stop off at the friendly neighborhood lender to see how much moola, cabbage, clam, boodle, dinero, gelt and pelf they can borrow.

The neighborhood lender says they can borrow 250 thousand bucks after reviewing their credit history and all the other stuff necessary to decide on the amount, like debt-to-income ratio and all of the other usual inquiries.

Groovy !

Next, Sam and Sally find a home they like and submit an offer at the same time that Dan and Deidra submit their offer.

Dan and Deidra haven't been pre-approved or even spoken to a lender yet.

The seller will most likely accept Sam and Sally's offer because they've been pre-approved for the loan.

You don't hear that word, pre-approval, much these days because lending restrictions are tough because the banks have less money to lend.

It's understandable now that hundreds of mortgage brokers have gone out of business and that little or no noticeabe confidence remains in the secondary mortgage pools anymore.

Many real estate agents still prefer not to deal with buyers unless they've been pre-approved for their loans.

The moral:

Save your money for a good downpayment and get pre-approved before you negotiate with the seller.

David Saks

Time&Temp Memphis

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Comment balloon 4 commentsDavid Saks • November 21 2011 04:49PM


David, excellent advice. Being Pre-Approved makes the entire process go by easier!

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) over 8 years ago

 David -- Great explanation of what the process should be, when one wants to buy a house.  Why Dan and Diedre would go shopping without knowing how much money is in their wallet baffles me.

Posted by Steven Cook (No Longer Processing Mortgages.) over 8 years ago

Thanks, Connie. It really does.

Posted by David Saks ((retired)) over 8 years ago

Exactly, Steven. No one in AR could know the truth behind that fact better than you do. I hope everyone starts encouraging the pre-approval process again like they were three, four or more years ago. They stopped doing it for who-knows-why. It could give us some signs of where the economy should be and it's strength.

Posted by David Saks ((retired)) over 8 years ago

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