It makes perfect sense to negotiate from the strongest possible position when you are ready to purchase a home. In today's market sellers can be still be selective with the final buyer they choose to negotiate with. It is still possible for a home seller to receive multiple offers on their property. With that said, there are certain things you can do to make certain that your offer is the one the seller selects.
A vast majority of home buyers today go about the buying process entirely wrong, and put themselves at an overwhelming disadvantage before they even place an offer!
Look at the buying process from the seller's perspective. If you were a seller and had multiple offers on your house, all things being equal, would you accept the one with a pre-approvial Letter from the perspective buyer, or the one that was conditional on financing? The answer is obvious.
So then, why do so many buyers wait to seek financing until after they have found the home they are looking for?
Many buyers I have spoken to believe they are financially qualified and are not worried about receiving a loan approval. Even though they are usually correct in that assessment, from the seller's point of view a seller has no guarantees. Sellers know nothing about a buyer's abiltiy to purchase unless a loan pre-approval letter is presented to them with the offer contract.
As a prospective buyer it makes sense to start the financing process early on so you can get a firm handle on what the lender has to offer such as interest rates, an estimate of points, and closing costs. If you do this before finding a home you are not under any time constraints. Also, veteran realtors counsel their sellers to be very cautious of offers with no pre-approvial letter attached. And did you know... the purchase contract states that a buyer must present to the seller verification of how they will finance the home within one week of acceptance? If you are serious about purchasing a home, why would you not want to get pre-approved early?
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