Looking to Buy? Get Pre-Qualified

Tim Ford

Buying a home in Bozeman is tough right now. The multiple offers and bidding wars have gotten crazy. Depending on the price range someone is looking in, there can be more than a dozen offers on one home. The most I’ve heard of is 29 offers – 29! On one house.

Many homes coming on the market today are getting offers in just a matter of hours of hitting MLS. Hours, not days. I’ve often made the case that it’s important to get pre-qualified for financing early in the home shopping process, before a buyer finds the perfect home. In the current buying climate, it’s even more important. Most sellers and real estate agents are going to give preference to an offer that is accompanied by a pre-qualification letter over one that states they’ll get one soon.

If a buyer finds that perfect home, there may not be time to start the pre-qualification process. It is also very common to be looking at homes or making offers on Friday afternoons or over a weekend when most banks and lenders aren’t answering their phones. Pulling that pre-qualification letter together over a weekend is often difficult, if not impossible.

Additionally, lenders are extremely busy these days. Not only are they dealing with the financing for a record number of purchases in our market, but the low interest rates have created a refinancing frenzy that has pushed their ability to keep up with business to its maximum.

The pre-qualification process can be even more important for high-net-worth individuals. Many high-net-worth individuals have complicated tax returns and various sources of income. A lender may need some time to find the best route to get them approved.

Another important reason to meet with a lender early in the process is to ensure that the buyer’s credit score is accurate. It is not unusual for a consumer’s credit report to contain inaccuracies that may lead to a lower credit score. The earlier in the process that this is discovered, the more quickly it can be resolved.

For buyers starting to think about getting into a new home in 2021, one of the first steps should be to meet with a lender to determine whether they qualify for financing. Meeting with a lender may not seem like the fun part of the process, but tackling this obstacle early in the search will help give the buyer a fighting chance in today’s market.

I have included recent sales data for the first month of 2021. In addition to the 53 homes sold in January, another 128 homes are currently under contract or pending as of the date of writing. This compares to 114 home sales pending at this same time last year.
The included data reflects sales of homes in the greater Bozeman area, including Four Corners, Gallatin Gateway, Bridger Canyon, and Bozeman city limits. The data includes home sales reported through the local Big Sky Country MLS, and does not include private party sales, Condominiums, or Townhouses.

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