1.  It is generally a good idea to get pre- qualified.

Many sellers require a pre-qualification letter with your offer to purchase.  So you should  have that readily available when it comes time to make an offer. In general it will make your offer look stronger.

2. There is no cost associated with getting pre- qualified.

Often when people are considering buying a home whether it be a first time investment or another home, they believe they can just purchase one like buying a new item for a kitchen. That is not usually the case. Here are some things you should do before you buy a home.

Check with a lender to see what you qualify for.

You should know facts such as:

Annual Income
Amount of Cash you have for a down payment*
Other Home Loans
Credit Card Balances
Other Loan Balances (Vehicles, etc.)
School Loans
Other factors affecting your income e.g. child support, tax payments, dividends, etc.

*Note: Some first time home buyer loan programs do not require a down payment.

4. Pre-qualification is where you have spoken to a lender about a possible home loan.

This is when you have spoken to a lender, usually over the phone. You will provide him with the information described above. They in turn will give you an estimate of what they believe you would qualify for if all the information you have given them is accurate.

IT DOES NOT MEAN YOU ARE APPROVED!!

People often think because they are pre qualified they can get the loan when they find the home of their dreams. That is not true. At this point in the loan process they have not run a credit check, or verified any of the information you have provided. There may be things on your credit report that are inaccurate or that you have forgotten about that may inhibit the loan process, or affect the loan amount.

5. When we find a home we like how do we buy it?

A: It is a many step process here is a brief overview of the process

You will need an earnest money check to accompany the Offer to Purchase. This may be in the form of a personal check, or in some cases a certified check. A minimum of 1% of the sales price is deemed adequate in most cases. When your written Offer to Purchase is presented to the seller, he has three choices:

1. He can accept your offer
2. He can reject your offer
3. He can make a counteroffer.

Negotiations after the initial written offer are conducted verbally until an agreement is reached. When the seller accepts your offer, or you accept his counteroffer in writing, you have a binding contract for sale on that property. Your earnest money will be deposited in the listing broker's trust account to be held until closing.

 6.  Is it best to make a really low offer at first?

It is important to remember that if you make a low offer on a home and the offer is rejected or countered, another prospective buyer may submit an offer that may be accepted by the seller before you have the opportunity to submit another offer or accept the seller's counter to your offer.