Ever had an agent deny to show you a home because you weren’t pre-approved for a mortgage? It’s not because they’re mean, or they don’t value your business… it’s actually because they’re looking out for your best interests.

Let’s face it, shopping for a home before getting pre-approved for a mortgage is like walking into a grocery store without a wallet. You may have the desire to buy, but you lack the ability. Let’s cover some basics…

What is a mortgage pre-approval?

In a nutshell, a mortgage pre-approval is written assurance from a lender or broker that you’re able to borrow money to purchase a home up to a certain amount. It’s based on the income, employment and asset documentation you supply at the time of application, in conjunction with your credit history. So let’s look at the 6 reasons you should get pre-approved.

1. It carries more weight than a “pre-qualification”.

A pre-approval differs from a pre-qualification. With the former, the lender has actually checked your credit and verified your documentation to approve a specific loan amount (usually for a particular time period such as 30, 60 or 90 days). A pre-qualification can be useful as an estimate of how much you can afford to spend on your home, but it’s a less accurate indicator of your ability to purchase. A pre-approval always carries more weight.

2. You’ll know how much house you can afford.

Getting pre-approved before you begin house hunting allows you to know how much house you can realistically afford. Knowing this narrows down the options and makes the selection process more efficient. Not to mention, it protects you from the unpleasant surprise of realizing the home you fell in love with doesn’t fit your budget.

3. It adds clout to your offer.

In many markets, homes attract more than one offer. If the sellers are weighing one offer against another, they may lean towards the one accompanied by a pre-approval letter. That’s because pre-approvals instill confidence that the buyer is financially capable of purchasing their home.

4. It could increase your negotiating power.

In addition to strengthening your offer when compared to buyers who haven’t taken this step, getting pre-approved may give you the upper-hand when negotiating the price. If the homeowner is eager to sell, they may be more willing to accept a lower offer from someone they’ve been assured is financially capable of purchasing their home.

5. It saves time.

Obtaining a mortgage is a lengthy process. Getting pre-approved ahead of time shortens the time between contract to close — this way you’re ready to proceed with finalizing the mortgage once you’ve found the home you want to purchase.

6. Without it, most agents won’t work with you.

Makes sense, too. Right? Think about it: when you hire an agent, he/she will invest countless hours showing you homes over the course of your house hunt. If you were in their shoes, wouldn’t you want assurance that your hard work would lead to a favorable outcome for both you and your client?

There’s no denying that the inventory crisis (which, according to the recent Housing Shortage Report from Realtor.com, is the worst facing the US in more than 20 years) has made things difficult for buyers. But according to a new report from the US Census Bureau and the US Department of Housing and Urban Development, things are about to start looking up.

According to the report, 1.3 million new building permits were issued in May 2018—up a solid 8% from last year. And housing starts (construction on new homes that’s been started but not completed) was at 1.35 million—up a whopping 20% from May 2017. (Both new building permits and housing start statistics are at a seasonally adjusted annual rate).

All this new construction—both construction that’s already started and construction that will soon start thanks to new permits being issued—will be hitting the market soon. And when it does, that new inventory will cool off markets across the country and make it a lot easier for potential buyers to find and buy a home.

The Takeaway

So, if you’ve been thinking about buying a home but have been hesitant thanks to the high prices, crazy competition, and low inventory, get ready—all this new construction means things will be looking up soon.

Why do you care if your Realtor considers you a good client or not? Because the better client you are, the better results you will have. No, you and your Realtor do not have to be in love with each other, but effort on your part will bring you better results and a more positive transaction. Here are some best practices.

1. Be easy to educate

Most Realtors are teachers at heart, and the more you can learn, the better prepared you will be. Yes, your friends, family and various websites have lots of good information to give, but nobody has a better “boots-on-the-ground” perspective on your local neighborhood and various current trends than your Realtor. Ask all the questions you like and try to absorb as much info as possible. Yes, there is a lot to learn, but you will find that you become educated very quickly.

2. Be easy to communicate with

If your Realtor must text you five times before you respond, you will eventually miss some important info or even the house of your dreams. Ask your Realtor for communication expectations and let them know if you prefer calls, emails or texts. If there is a time that you do not wish to be contacted at all (say, when you put your kids to bed), make sure your Realtor knows that in advance. They will probably have a “no-contact” time, too. Of course, if your Realtor is constantly difficult to reach, you may want to consider switching to somebody else.

3. Be as available as possible

Of course, you are not expected to take off work to see a home, but see what accommodations can be made in your schedule. This is critical in viewing homes in a hot market. If you are selling a home, please be mindful that after-work and evening showings are highly likely. The more people that see your home, the better and higher price offers you will get.

4. Be loyal

House purchases and sales do not just take your time, they take your Realtor’s time too. If your Realtor learns that you are also working with several other Realtors, it is understandable that they will just not be as motivated to work hard for you. If you are unhappy with the Realtor that is selling your home, ask for a meeting to turn things around. Again, be clear about your expectations and be willing to listen.