Hello Everyone!

I am not an agent or broker, but a buyer and I figured
this would be the best place to ask my question!

I am planning to put in a backup offer on a home I want to buy
and I was wondering when I need to start on getting the loan approval?

Do I start now and get everything I need to get accepted by the bank such as paying for an appraisal already?
Or do I wait until the primary buyer's deal fails first?
If I need to wait, then what should I be doing in the meantime?

I'm sure this is a simple question, but I just want to make sure I do this right.

Thanks in advance.

First, I hope you have a buyer's agent. Your questions are pretty basic, so I'm guessing that you do not have an agent. Get one!

Now to answer your question: Put in the offer, but also get prequalified by a lender. Many lenders offer same-day decisions on prequalification, and that prequal will certainly make your offer more meaningful. If you are seriously ready to buy right now, you might as well get serious about the loan process.

Hello,
Thanks for the reply! It's very much appreciated.

After I have gotten prequaled and put in the offer, should I expect to immediately go through the typical process of getting full bank approval or does that wait until AFTER the primary buyer's deal fails?

Ive gone through the loan process before, but never had to wait for another buyer's deal to fail first.

For full bank approval Im going to need to pay for an appraisal, but in this case does that happen after the first buyer is out?

This is the only house I am interested in, so I don't plan to go after another home if the first buyer's deal works out.

Thanks!

For full bank approval Im going to need to pay for an appraisal, but in this case does that happen after the first buyer is out?

that would be premature. I doubt that the seller will allow you to have an appraisal done while the sale is pending with another buyer.

Thanks for the reply Shana.

Thats what I am thinking too.

Thats why I don't exactly understand how this process will work.

After prequal and backup offer, do we start the loan approval process (minus Appraisal and title?) or do we wait and see what happens first?

Two things #1 do get pre-approved from you lender.
And two try to find out just how strong the contract is that this seller has. Dont forget you will be in a back up your contract only goes into first position if the contract currantly in place falls through. If its fairly strong I would not recomend you do anything just yet. The seller will allow you to do any inspections and appriasals you want. after all they have nothing to lose and everything to gain.

I am still confused about if you have an agent or not. If not, you should get one in your area to represent you on the purchase. This will benefit you and they can answer all of your questions for you as well.

I would be happy to refer you to an agent in your area if you don't have one yet. I have a referral network of agents in all areas around the country that I can send you to. This way you will at least be represented. Feel free to call me if you would like my help.

Lutz,

Once you have a buyer's agent, he/she will contact the listing agent and track the progress of the current contract. I REPEAT, you can put in a back-up offer, and I strongly advise you to do that through a buyer's agent (not the listing agent). Your offer will be more impressive, if you at least have prequalified for a loan. Loan approval is a more comprehensive process which goes beyond prequal, and it may or may not involve the purchase of a specific house. You can be pre-approved for a specific purchase amount before you have actually chosen a house.

You don't have ANYTHING appraised until you are actually under contract on a specific property. AFTER you are under contract for a house (not just as a back-up contract but as the primary contract), the loan approval kicks into high gear; and things such as appraisal and inspections get scheduled.

The above is just a sketch of the process. You need a REALTOR. I advise finding an Accredited Buyer's Agent (ABR). Private message me if you want help finding one.