Why Get Pre-approved? Structuring Your Offer to Get the Best Deal

Dated: April 15 2021

Views: 2

Let's face it, this is a TOUGH market.  Welcome to 2021!  Homes are going over asking!  Seller's are asking buyer's to waive just about everything.  It's raining cats and dogs, the sky is falling oh my!

Sometimes I am working with a buyer and they say to me, "John I am going to wait until I find something until I get pre-approved."  Unfortunately this has NEVER been the right answer especially in this crazy market.  Matter of fact it is very wrong.  The below is from a blog post written a couple years ago.

The most important thing I tell a buyer is to get pre-approved early if they are seriously considering buying a home.  It helps see "the big picture." If anything does happen to come up on the credit report, why not have a professional help guide you through it.

I have a list of preferred lenders I work with.  Reach out and I will gladly share it.

Read on... 

 Buying a home is a dream come true, but the process of getting an offer prepared and accepted can be a nightmare if you don’t know what you’re doing.

 There are over 80 variables that need to be managed properly when buying a home and mishandling just one of them could cost you tens of thousands of dollars in unnecessary expenses.

 Making a home purchase is expensive enough that you don’t need to part ways with any more of your hard-earned cash than absolutely necessary.

 There’s good news: by getting pre-approved and structuring your offer in the right way, you can get the best deal on a home you absolutely love.

 Here’s what you need to do to make that happen.

 Your Pre-Approval is Like Having Cash in Hand, well next best thing... 

Whether you’re competing with another buyer for a home or not, it’s absolutely vital to get pre-approved from a valid home lending institution in hand.

 I can’t stress valid enough as pre-approvals from little-known online websites or from a place like Bob’s House of Mortgages and Auto Repair, claiming to have the best rates for a loan, are almost certainly going to doom your purchase down the road.

 Also, please know that there’s a huge difference between a pre-qualification and a pre-approval.


 According to Realtor.com, here’s the main difference between a pre-qualification and a pre-approval:


Pre-qualification means that a lender has evaluated your creditworthiness and has decided that you probably will be eligible for a loan up to a certain amount.

But here’s the rub: Most often, the pre-qualification letter is an approximation—not a promise—based solely on the information you give the lender and its evaluation of your financial prospects, and…

Pre-approval...is the real deal, a statement from a lender that you qualify for a specific mortgage amount based on an underwriter’s review of all of your financial information: credit report, pay stubs, bank statement, salary, assets, and obligations.

Pre-approval should mean your loan is contingent only on the appraisal of the home you choose, providing that nothing changes in your financial picture before closing.”

Once you get pre-approved, be sure to confirm with your lender that it’s only subject to the home you buy appraising at the value for which it’s being bought.

And here’s why: when you make an offer to a seller and the only thing that’s required from you financially to buy the home is that the home appraise for the price at which you’re buying it, it’s almost like having cash in hand to buy the home.

A solid pre-approval removes all the doubt from the seller’s mind about whether or not you’ll be able to afford the home and gives you the ability to negotiate, with confidence, to get the best deal for the home.

It literally puts you on the same playing field as a buyer who would buy the home with a cash offer and allows the seller to take you seriously as you negotiate to get an amazing deal on the home.

Always be sure to get pre-approved before you buy a home. 

Put Your Best Foot Forward

Once you have your financing in order and you find a home that you’d love to own, there are a few key things you absolutely must do to structure your offer so you get the best deal:

  1. Do your research

The goal of submitting an offer on a home is to get it accepted so that you can work through the home buying process and end up with the perfect home at the perfect price. 

The best way to start this is to make sure that you know as much about the seller and what their goals are as you possibly can. There are lots of things that are important to a seller in addition to the price they’re asking for the home.

Here are the top 10 reasons people sell:

So, in addition to making sure that the home is priced properly, you’ll also want to find out:

  • If timing is more important than price (some folks just want to get out of “dodge”, so to speak)

  • When they would like to be out of their home

  • What they’re wanting to take from, or leave with, the home

  • How quickly they’ll be able to look at, and respond to, your offer

  • If the price they’re asking is firm or if there’s any room for negotiation

  • What else is important to them in the sale of the home

The more information you get from the seller, the better job you can do in preparing an offer with which they’ll want to work.

Do your best to give the seller what they want when you can so that you can get the best deal on the home.

Now, am I advocating that you pay them full price and do everything to their liking.

In short, no.

But if the home is a good deal and the time frame and other stipulations work for you, too, structure your offer so that there’s a great chance of getting it accepted.

And if there are things you need that aren’t in line with what the seller is looking for, then draft an offer that has a true “win-win” feel to it. Make concessions to the seller that you can live with and ask the same of them in return.

Having a peace-treaty mindset where everyone feels like they are giving and getting the same amount almost always results in a great sales transaction for both parties.

  1. Make a solid earnest money deposit

It’s a simple strategy, the more money you put down as earnest money on the home you’re going to buy, the less likely you are to walk away from it.

    Sellers like that.

The good news for you is that you could put the ENTIRE purchase price of the home down as earnest money and get every penny back if things like the home inspection and/or appraisal don’t go your way.

I’m not suggestion you put down that much money, but I am recommending putting down a solid amount so that the seller knows you’re serious about buying the home.

Taking this approach as you structure your offer for the seller can help you get the best deal for the home you’re looking to buy without having to pay extra to buy the home.

  1. Be aggressive on non-monetary aspects of the home purchase

Real estate transactions can be very emotional events and as such, nobody likes to wait around for things to happen - good or bad. Everyone wants to know if the deal is going to work out as soon as they possibly can so that they can take care of the other aspects of getting moved like packing, setting up utilities, updating address and phone information, schools, etc.

Blog author image

John Woodman

As your local real estate agent I am here to guide you through every step of the process, start to finish and beyond. John enjoys working with first time home buyers and sellers but can help in every ....

Latest Blog Posts

Why Right Now Is a Once-in-a-Lifetime Opportunity for Sellers

If you’re thinking about selling your house in 2022, you truly have a once-in-a-lifetime opportunity at your fingertips. When selling anything, you always hope for strong demand for

Read More

Are You a Homeowner Thinking About Climate Change?

Americans are more aware than ever of the effects climate change and natural disasters can have on their homes. According to a report from realtor.com:“More than 3 in 4 recent

Read More

The Next Generation of Homebuyers Is Here

Many members of Generation Z (Gen Z) are aging into adulthood and deciding whether to rent or buy a home. If you find yourself in this group, it’s important to understand you&rsquo

Read More

Why Pre-Approval Is Key for Homebuyers in 2022

You may have heard that it’s important to get pre-approved for a mortgage at the beginning of the homebuying process, but what does that really mean, and why is it so

Read More