The process of investing in or buying a home or condo in Las Vegas should start with getting pre-approved

November 22nd, 2008 · No Comments

The process of investing in or buying a home or condo in Las Vegas should start with getting pre-approved.

Why is it so important to be pre-approved before you look at any properties?

1: You will save much time, effort and heartbreak by knowing exactly how much home or condo you can afford and can concentrate on your price range. If all that the buyer can afford is a $280,000 home, the time that the buyer wastes on looking at homes in $300,000-$350,000 range can be utilized better by looking at properties in his/her price range.

2: In the current real estate market condition, the chances are great that the buyer will end up buying a foreclosure or short sale property in Las Vegas, North Las Vegas or Clark County; banks will not consider an offer on their property unless the buyer attaches pre-approval from a lender. Even then many of these lenders require a second prequalification from a mortgage broker of their choice. They do so in order to have a shot at financing the buyer themselves so they can make the loan origination money.

The seller’s lender usually offers a couple incentives to encourage the buyer to use them; these incentives may include the lender paying the fee to obtain credit records which is nominal to pay for the appraisal which is in $300-$400 range. The problem is that without being pre- approved the buyer has nothing to compare the seller lender’s offer against.

3: FHA and VA loans are the engine that runs our current banking economy; banks like to make these loans because they are backed by the US government. However offers that are made on behalf of a buyer that finances their purchase through these loans must conform to the specifications that are imposed by FHA and VA lenders. For example; if a veteran wants to buy a condominium, the condo project must be approved by Veteran Administration or FHA. Your Realtor must know if you are using an FHA or VA or conventional loan so the offer would comply with their rules. How can your Realtor know which loan you will get if you haven’t been pre-approved?

I will continue the discussion about getting pre approved before seeing a single home or condominium for sale in Las Vegas, North Las Vegas and Henderson in addition to un-incorporated Clark County in the next post