If 2024 is the year you decide to take the plunge and apply for a home, pre-approval is a term you’re likely to hear pretty quickly. But what does that actually mean for you and the home-buying process? Here’s a closer look at why it matters and how it might affect your home search.

Why Does Pre-Approval Matter?

Securing a home in 2024 comes with its own set of challenges, many of which pre-approval can help with. Pre-approval is a fancy term for what happens when a lending institution evaluates your financial situation to determine the amount they’re willing to lend you. This preliminary step results in a document indicating the potential loan amount, guiding you to make well-informed decisions regarding your budget. It enables you to refine your search for a new home to fit your financial comfort zone and positions you to swiftly make an offer when you spot the perfect property.

Pre-Approval is Critical in Multi Bid Situations

With an increase in property listings yet a persisting shortage in the housing supply, the market dynamics are more competitive than ever. In addition to this, the recent dip in mortgage rates has re-energized the buyer market, escalating competition. In this competitive landscape, having a pre-approval letter tells sellers that you are a serious and financially vetted buyer, giving you a competitive edge.

More Tips for Dealing with a Competitive Housing Market

How to negotiate, and close quickly on a home.

Stay Open Minded

Exploring homes in various zip codes will reveal opportunities in less competitive markets, potentially leading to better deals. Sometimes, expanding your search by just a bit can help you find your dream home at a price point that works.

Allow for Wiggle Room

Flexibility is what’s going to set you apart from other buyers—especially in an ultra-competitive market. Offering conveniences—like allowing the seller extra days post-closing—can make your offer look more appealing.

Get Ready to Move Fast

Negotiating a closing date with the seller could be crucial for the process, hence the importance of planning your move early. Early planning makes for a smooth transition to your new home once the deal is sealed.

Don’t Stray from Your Financial Comfort Zone

In a market where properties often sell above the asking price due to high demand, aiming for homes within or below your budget is certainly wise. This strategy positions you to make compelling offers, especially crucial in multi-offer scenarios.

When you leverage the power of pre-approval, along with adopting strategic approaches to your home search and negotiations, navigating the 2024 housing market is bound to be a more manageable and successful endeavor, no matter what the market is doing at the time.

Keep Reading: Michigan Homebuyers May Have More Opportunities in 2024

About Julie Krumholz from Superior National Bank

Ready to start the homebuying process for 2024? Julie Krumholz from Superior National Bank can help.

With over 30 years of experience, Julie Krumholz is no stranger to shifting housing markets. She’s experienced nearly every facet of the mortgage industry, from processing, closing, loan origination, underwriting, QC auditing, and even co-owning a mortgage brokerage firm. Julie uses her wealth of experience to match homebuyers with the best mortgage program for their needs and helps streamline the mortgage process.

Call Julie Krumholz for help with your homebuying needs at 586-382-5482