Mortgage 101

Should I Get a Preapproval Before Getting a Real Estate Agent?

By Jessica Brita-Segyde on January, 30 2021
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Jessica Brita-Segyde

If you haven’t done so yet, start looking for a real estate agent. Find an agent you trust, talk with them about whether you’re ready to buy and sell, then move forward with the preapproval. If you do get preapproved first, find an agent as early as possible in your home search. Hiring a real estate agent is like hiring any financial professional, such as a CPA or stockbroker. It benefits the consumer to find an agent with experience, referrals, and a good reputation.

How Do I Find a Good Real Estate Agent?

The best agents work by referral. They are not necessarily the “big names” who advertise on billboards and house-hunting websites. Experienced, top-notch Realtors usually advertise via grassroots methods like community involvement and word-of-mouth. Do you have a friend or family member who loves their home (and doesn’t hate their payment)? Ask for the name and contact information of their Realtor. Also, it helps to interview two or more agents before deciding who to trust with your home search. Consider that most relocation companies require that their clients interview at least two agents…and that’s after those agents have been vetted for knowledge and reputation within their local market.

Do I Really Need to Get Preapproved Before Shopping?

Yes, it is highly advised that you have a preapproval ready before making an offer in any market, and especially in the current low-inventory environment. Preapproval gives you, the buyer, more bargaining power and will enable your real estate agent to better negotiate on your behalf. Homes go fast in a tight market and you will not likely have time to get preapproved before others get their offers submitted on a desirable property.

In addition to making your offer presentable, pre-approval has another benefit. Regardless of market conditions, it helps to know the maximum loan amount you can or would want to obtain. This way your agent can guide your home search toward properties that are the best available at your price point.


How Do I Get Preapproved?

Contact a loan officer in your area. Ruoff Mortgage is a great place to start and you can even begin your application for preapproval online. You will be asked to fill out a loan application and provide paperwork, though not as much paperwork as with a full loan approval. Based on the information you provide, your lender may offer you a preapproval up to a specified loan amount. The details of your loan offer are likely to change by the time you actually close on your new home. Market forces, internet rates, and verified income and assets are all factors that could affect the loan amount you are ultimately offered. Preapproval letters are usually valid for 90 days. If your home search takes longer than this, don’t fret! Your loan officer can work with you to update your paperwork and issue a new preapproval letter to keep you in the market.

What If My Preapproval is Declined?

If your loan officer is not able to extend a conditional loan offer at this time, discuss the circumstances with your real estate agent. They can still keep an eye out for homes that might interest you when you’re ready to move. A good Realtor will also stay in communication with your loan officer to ensure that the transaction moves forward as soon as you are ready and able to buy.

If you are brand new to the real estate market, or if you are just beginning a new home search, start interviewing Realtors. Next, find a friendly, experienced loan officer in your area and apply for loan preapproval. Having these two professionals on your side will enable you to shop with confidence in today’s real estate market!