What is Your Home Buying Power?

What is Your Home Buying Power?

Lenders, pre-qualify, and PROOF! These are all important factors in your buying process. They make up the process of understanding your buying power. Let's dig in a bit deeper.

You have decided to buy a house. That is a HUGE step. Now you are asking yourself all the fun detail questions. What neighborhood do I want to live in? How big of a house do I want? Do I want carpet in the house?

The most important factor is your financial picture.

It can be fun and exciting to look at homes online and to stop by a few houses. However, without understanding your financial situation, you may make some ill-informed decisions.

What is your buying power? Buying power is how much home you as a buyer can afford.

How much home can you afford? How much do you want to afford? Sometimes the answers to these two questions can be different. A bank may tell you that you can afford that $750,000 house, but your budget says you can only afford $500,000.

The first thing to do is sit down with a lender to help you determine how much home you can effort. The lending professional will go through all your numbers with you and he/she is the only professional who can help you find your buying power. It is commonly known as being pre-qualified. It truly is just understanding and being able to articulate your buying power.

Your REALTOR will want to automatically, before your go look at homes, want you to be in a POWERFUL buying position and know EXACTLY what you want to afford on any given day.

In fact, I suggest you do this even BEFORE searching for homes online. Why? Because otherwise, you may be looking in a different range than your buying power. The first thing your REALTOR will do is help you get in touch with a lending professional.

What does buying power mean to a seller?

Well, when a seller receives an offer on their house it may look good, but without PROOF the offer means nothing. The proof is the pre-qualification or the communication of your buying power. Having proof is essential during a seller's market and multiple offer situations.

Write This Down

It is good practice that when you submit an offer you submit proof to the seller and the seller's agent. This helps you beat the competition.

Lastly, make sure you are working with a qualified and knowledgeable Real Estate professional who can guide you to understand your buying power. A Real Estate professional like ME!!!

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Interested in more tips, tricks, and strategies? Download a copy of my informative buyer's guide to help walk you through your home buying process.  You can also visit my YouTube Channel for a series of videos about how to go about buying your next home.