What is a Power Bid pre-approval?
Power Bid pre-approval is a stronger type of pre-approval that is becoming increasingly popular in today's competitive real estate market. As explained by David Lenoir, a real estate agent based in the Greater Boston area, and Rick Waldron, the VP of Mortgage Lending at Guaranteed Rate Affinity, Power Bid pre-approval is a full credit underwrite that involves collecting all the necessary documentation before a buyer identifies a specific property. This includes income and asset credit documentation, which will be submitted to underwriting for a full credit review and approval.
Obtaining a Power Bid pre-approval can give buyers more leverage when it comes to making an offer on a property, which is especially important in a competitive market. In addition, this type of pre-approval can help to streamline the closing process and enable buyers to close quicker, if necessary. Since the client has already been through the underwriting process and their file has been reviewed by the decision-maker, also known as the underwriter, the closing process can be much smoother once the Purchase and Sale Agreement has been fully executed.
One of the benefits of a Power Bid pre-approval is that buyers don't need to have a property address to obtain it. This type of pre-approval is valid for 90 days and can be easily updated, making it a smart choice for motivated clients actively searching for a property.
While the turnaround time for a Power Bid pre-approval is generally 48 to 72 hours, it can vary depending on the situation. For example, if the buyer is self-employed, more due diligence may be required, and more information may need to be gathered. However, with proper preparation, there is no reason not to obtain a full credit approval if you are actively looking for a property.
In some cases, a general pre-approval can be generated quickly by the loan officer and run through an automated underwriting system. However, this type of pre-approval is sometimes based on unverified information, making it less reliable than a Power Bid pre-approval. By contrast, a Power Bid pre-approval involves a thorough credit review and underwriting process, making it a more reliable indicator of a buyer's creditworthiness.
Preparation is critical, especially if you're a very motivated client, there's really no reason not to have the power bid be completed. It's valid for 90 days. Pretty easy to update even after 90 days. But there's really no reason not to obtain a full credit approval if you're actively out there looking.
The Power Bid pre-approval can also be useful for sellers in a competitive real estate market. By encouraging potential buyers to obtain a Power Bid pre-approval, sellers can have more confidence that the offers they receive are from serious and qualified buyers. Additionally, the streamlined closing process enabled by a Power Bid pre-approval can make the entire transaction smoother and more efficient for both buyers and sellers.
A Power Bid pre-approval can be a great tool for active home buyers who want to submit an offer quickly. With the security of a full credit underwrite, potential homebuyers can enter into a competitive market with confidence. By investing in the upfront commitment of a pre-approval process, you are taking a proactive step in finding your future home. By obtaining a full credit approval, prospective home buyers can gain both security and convenience in looking to find a smooth and efficient path to your dream home.
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