Pre-Underwriting: What is it and how can it get you a new home?

As a buyer, you know it is a competitive market here in Boston. Not only do properties sell quickly, but oftentimes there are multiple offers to contend with to get the home of your dreams. So, what are some of the ways you can compete? Well, having the strongest offer possible certainly gives you a fighting chance for a seller to accept your offer.

What Makes A Strong Offer?

Well, there are a few factors that most sellers look at when considering an offer on the table. (See our “Sticky Offers” article for some more information on these.)

• Timing: The more flexible you are and, typically, the quicker you can close on the transaction, the better.
• Contingencies: Removing or “tightening” the time frame can be appealing to a seller for a variety of reasons.
• CASH: Cash buyers are still a huge thumb’s up for many sellers as it expedites and eases the process.

So let’s say you can’t/don’t want to pay cash for your next piece of real estate. What can you do to make your offer more appealing?

Pre-underwriting

Simply put, pre-underwriting is when lenders take the approval process a step further and review all documentation that would be required for complete approval. This can also include verifying income and asset information upfront, giving a more “solid” approval for a perspective buyer. This helps put them on the same level as a cash buyer and potentially removes concerns from a seller down the road.

So when does this happen in the process?

Typically, this occurs after a home is chosen and an offer is accepted but before the contract is finalized.

As Paul Anastos told the New York Times, “What we’re doing is in the infancy stage,” he said. “It’s been an educational process for us, because of how competitive the market is.” Paul is the president of Mortgage Master based in Walpole, MA. One of his associates, Rosella Campion, has worked with Charlesgate on many deals and taught our Free Home Buyer Seminar regularly.