4 Reasons to Get Pre-approved Before Buying

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April 15th, 2021 0 Comments

It’s been a boisterous, competitive, and sometimes frustrating scene for buyers in the real estate market lately. We are seeing many buyers ready to either purchase their first home, upsize/downsize their home, people looking for that perfect income property, or simply buyers who are seeking a change of scenery. With extremely low interest rates, buyers have more purchasing power and are motivated to find their dream home. However, we are still experiencing record low inventory causing a supply and demand problem in the market.

While this is great for sellers looking to get top dollar for their home, it can be frustrating for buyers who lose out on homes because of other competitive offers. This is why in this article we emphasize that unless you’re buying in all cash, being pre-approved by a mortgage lender is essential before you start your search. You may be the highest offer, but it doesn’t guarantee you’re going to get the house. Sellers take the entire picture into consideration. They look at timing, conditions, option period, but most importantly they look for financial stability. It is ultimately up to the seller to pick which offer and they are looking at this important piece of your offer.

Learn 4 reasons why being pre-approved is important, especially in a competitive seller’s market.

When You Know, You Know

No one wants to put an offer on their dream home only to find out they can’t actually afford it. Buyers may have an idea of their price point by doing an online calculator, but lots of times they do not take into consideration HOA fees, home insurance and property taxes. Luckily for Colorado, property taxes are fairly low, around 0.6% in Boulder County, giving buyers more purchasing power but in states such as Texas, property taxes can be as high as 3.5% which can come as a major surprise. If you live in the lone star state, it may come as a shock that your taxes are the same price as an expensive private prep school.

You’re Attractive

We’re looking at you! By taking the time to go through a lender and get pre-approved, it shows the seller that you are serious about buying a home. This makes you a more attractive buyer when they are sifting through offer letters. Imagine you are head to head with another buyer with the exact same offer and the only difference is, you have a pre-approval letter. In almost all circumstances that will trump the other purchaser. While cash offers offer quickness of close and no concerns over appraised value, we have still seen solid offers with great loans (and lenders) win over cash.

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Walking into a home with a pre-approval letter gives you the confidence to submit an offer on a home you can truly afford. No vacancy for imposter syndrome here. You’ll also have the piece of mind knowing that you can afford the home so you can worry about more important things such as how well stocked the neighbor’s pantry is or what you’re going to do with the kitchen that looks like a scene from That 70’s Show.


A pre-approval means you have already gathered information for your lender. They will have gone through a credit check, your income statements, debt, etc… speeding up the process once you’re ready to close. Most sellers want to close within 30 days and if you have already gone through the pre-approval process, this goal is much more attainable. When you know exactly how much you’re pre-approved for, you will not waste your realtor’s, the seller’s, and most importantly your own time.


While having a pre-approval letter does not 100% guarantee you will get the loan, it is a conditional commitment in writing giving you a good baseline to start your search. A pre-approval will give you confidence, save lots of time, and make you more attractive to sellers. This is essential in any real estate market, but especially important in a seller’s market.

Amanda Lovato running

A final perk of having your lender lined up and in place prior to shopping for homes is that you have time to establish the relationship with him or her. Knowing that you may be leaning on them at odd hours of the night and on weekends to provide you with a prequal letter, it’s best to have that great rapport. Plus, on more than one occasion, the lender’s reputation in the community has actually helped the offer be chosen!

Lovato Properties has been in real estate for numerous years in the Boulder area. We have developed relationships with excellent lenders that fit every purchasing need. Reach out to get a list of our preferred lenders to get you started on the right path. We have seen all sorts of different personal financial situations and can help you navigate this first step in your buying process.

As always, we are here for you. We have walked, biked, ran, and driven every inch of Boulder. If you’re considering selling, reach out for a free market analysis and if you’re buying we are happy to get you started on your home search.

Boulder, Mortgage, Real Estate
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