Approval First

Approval First

In today’s competitive real estate market, many home buyers are finding themselves in a bidding war with other buyers – especially when a home is competitively price.

You would think that the highest offer wins. However, experience shows us that’s not always the case.

The Reason:

Sellers (and realtors) have been burned too often by accepting the highest offer from home buyers with “pre-approved mortgages” only to find out weeks later that the buyers were unable to turn their pre-approval into a full mortgage commitment.

The Cause:

The lending industry as a whole has unfortunately moved away from using experienced lending professionals and replaced them with loan originators, sales agents for the lender. This is especially true with online lenders. Not that their intensions are necessarily bad, but loan originators tend to base their pre-approvals on very minimal data – typically a credit report and verbal information provided by the buyer.

Based on many assumptions, loan originators issue pre-approval letters to buyers in hopes of converting as many as possible to a full loan commitment later in the process. This system puts home buyers, and their loan, at risk.

The Solution:

Today, convincing the seller that you are the most “qualified” buyer goes a long way in getting your offer noticed even though it might not be the highest bid.

Through American United’s Approval First program, we turn our clients into “cash” buyers by taking them through the mortgage underwriting process well before they place an offer.

Unlike a pre-approval, the Approval First process is a full underwriting review that nearly guarantees a final loan commitment will be issued (subject in many cases to a home appraisal only).

The Benefits:

• Showing the seller that you have a Full Loan Approval tells them you are a serious buyer that
  is able to complete the sale
• Completing the Approval First process prior to signing a sales contract allows you time to fix
  any issues that may arise
• Receiving a Full Approval in advance allows you to close quickly

Think about it. If you were selling a home and had two buyers to choose from – One with a pre-approved loan and the other with a Full Approval ready to close – which buyer would you choose?