Window Shopping
Open house etiquette: Is it OK to crash an open house when you haven’t been pre-approved?
Almost every advisor will tell you to get pre-approved before you start looking for a home. This advice is based on the assumption that most Americans will need to improve their credit and save up some funds before starting the process of buying a home. While this certainly is good advice, there is nothing wrong with window shopping especially if you are already financially fit. That being said, if you are ready (credit/income/savings/assets) then studying the neighborhoods and building your team of realtors, lawyers, and lenders ought to come next. Based on that premise, here are three reasons you should start going to open houses before you get pre-approved!
#1| Learning Many Neighborhoods/Research the Market
If you live in a big city like New York City, then you have a lot of work to do. It is imperative that you determine your needs from a neighborhood by visiting the area and shopping locally. Getting pre-approved before-hand may discourage you from looking in areas outside of your approval scope rather than encourage you to improve your financial fitness in order to live where you would truly be happy. Take the time before pre-approval to cover a large amount of land in your research and determine your wants, needs, and inbetweens. A pre-approval thereafter will help your heart have just as much say-so as the brain. Our goal is ultimate happiness!
#2| Meet Realtors/ Networking
Attending open houses gives you an opportunity to pick at the brains of a realtor. These individuals can answer many questions that have come up during your research, get you on the right path to the appropriate lender, or introduce you to grants/ special programs. For example, while talking to a realtor during an open house tour he mentioned that the house came with a fully renovated basement. This prompted me to ask if the basement was up to code and I was informed that the previous owner used the “pilot program” to convert the basement into a legal residence for rent. This program did not come up during my research and I was happy to meet a realtor that could potentially open this door for me and set me on a more fitting path. Rather than take a realtor by recommendation (likely through the people who did the pre-approval), I can formulate my team through impromptu interviews and then dive into the home buying process prepared.
#3| Motivation/Confirmation to yourself
After your third or fourth open house you have learned a lot and are now asking your self the hard questions. Is this really what I want now that I know a little more? Before I take an arguably small hit to my credit score with a hard inquiry from pre-approval, am I sure that I want to start my journey on the home buying process? You may decide that the answer is yes, however you are now focused on multi-family homes for pre-approval instead of single. Head into the pre-approval process knowledgeable.
Again, there is nothing wrong with getting pre-approved first but it is also okay to test the waters so-to-speak if you are financially fit. Purchasing your first home is a 3-6 month process, commitment, and job! Get informed by networking and creating a team of support that will guide you along your research. This will make the hunt more tolerable and fulfilling when all is said and done. May the force be with you!
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