What could be more comforting than the peace of mind that goes with knowing your mortgage is fully approved? You will have a greatly improved negotiating position when you are pre-approved for a mortgage. Sellers are more apt to negotiate with someone who already has a mortgage approval in hand. The pre-approval letter lets the seller know they are working with a serious buyer. A pre-approved buyer can also close on a property more quickly - another major consideration for a motivated seller. Obtaining a pre-approved mortgage is essential in a "sellers' market" or where supply is limited.

Pre-approval uses basic information as well as electronic credit reporting. It is a true mortgage commitment. Which means a commitment to financing your home and an indication of the total mortgage amount available to you. Your lender can help you through the pre-approval process. In most cases, there is no charge for this service.

Pre-qualification, on the other hand, is not a full mortgage approval, but an estimate of what you can afford. When you pre-qualify for a mortgage, the lender collects basic information regarding your income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount.

Home Purchase Negotiation

Here are ten important questions you should ask (& why you should ask them) before you make your offer:

1. HOW LONG HAS THE PROPERTY BEEN ON THE MARKET? Why: The length of time a property has been on the market may indicate the sellers willingness to negotiate.

2. HAVE THERE BEEN ANY PRICE REDUCTIONS DURING THE LISTING PERIOD? Why: The amount of any price reduction, as it relates to the overall purchase price, may indicate the sellers desire to attract an offer

3. HAVE THERE BEEN ANY OTHER OFFERS ON THE PROPERTY? Why: It will be helpful to know what offers may have been turned down and for what reasons.

4. WHAT IS THE MOTIVATION OF THE SELLER? Why: Motivation is a key element in any negotiation. As an example, if the seller has already purchased a new property, your ability to close quickly may be an attractive element of the negotiations.

5. WHAT PERSONAL ITEMS ARE INCLUDED IN THE SALE? Why: Anything the seller is willing to leave behind that you won't need to buy when you move in has real value. Consider those items in your offer

6. WHAT IS THE PRICE RANGE OF SOLD PROPERTIES IN THE AREA? Why: This information is important since it will indicate the top and bottom of that specific market.

7. WHAT IS THE AVERAGE TIME ON MARKET FOR PROPERTIES IN THIS AREA? Why: Short market times may indicate a sellers' market. If this is the case, you may face competition from other buyers.

8. WHAT IS THE LIST TO SALE PRICE RATIO IN THIS AREA? Why: This information will indicate sellers' past willingness to negotiate and by how much.

9. WHAT IS THE AVERAGE SALES PRICE PER SQUARE FOOT OF RECENT SOLDS? Why: This approach to establish value works best in a P.U.D. and/or where there are similar homes, lot sizes and improvements.

10. WHAT OTHER KNOWN FACTORS ABOUT THE PROPERTY OR NEIGHBORHOOD COULD AFFECT VALUE? Why: Review the Sellers Disclosure Statement very carefully with your Sales Associate.

Final Recommendation:  if you will be financing the property, get pre-approved for a mortgage prior to making your offer. This will show the seller your commitment and ability to perform. Pre-approval can be extremely important in a sellers' market.