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Many buyers assume how much they can afford to spend on a home and start searching online by themselves at first. I probably would do the same, but if you are a serious buyer, then you really need to get pre-approved first.
I had clients who were working with another agent. They were a young couple and decided to buy their first home before getting married. They 'thought' they could go up to $300K~$350K based on their income etc. They found a condo near Lake Union, Seattle and requested the listing agent to show it to them. The agent of course showed it to them, but they did not like the layout. So she showed a couple more condos in the area to them the following weekend. All were about $350~400K range. One of them had granite counters and stainless appliances and a view of Lake Union. They loved it! They were excited. So they talked with their bank and found out that they could not go that high. They were very disappointed and decided to take a break.
After a few months, they came to me. I sat down and asked typical questions - what they want, what price range they were thinking.... And I told them the importance of getting pre-approved. Then they started telling me about their experience with the previous agent. I am not here to judge her for not asking them to get pre-approved. I am here to let Buyers know the importance of getting pre-approved before searching. In this case, it was very hard for them, especially for the female client. She was so in love with one of the condos they saw a few months ago. But it was $200K higher than they could afford and HOD was almost $400/month. Now with the new price range, we had to look outside of Seattle. I had no idea why they thought they could go $350K in the first place. It was way off to begin with, so they had to adjust their mind set and expectation. At first, nothing was good enough to my female client but eventually she understood and accepted the reality.
If they got pre-approved before searching, they did not have to go through this unnecessary emotional roller-coaster ride. $400K condos and $200K condos are very different. If you see $400K condos first, of course everything you see in the $200K range will look less attractive. In the end, they found a lovely condo outside Seattle and they are happy now, so it all worked out. But they could have avoided the emotional roller-coaster ride if they talked with a bank first.
Buyers, please know it is important for you to know your price range. If you are just looking around and having fun, that's fine. But if you are serious about buying a home, then you need to get pre-approved before shopping. You need to know how much you can afford... We are not giving you any pressure. We are here to help you.
