How many times have you been asked "What is the difference between a pre-qualification letter and a pre-approval?" Here is a basic rule of thumb and why you should always get a pre-approval from a prospective client.
A pre-qualification can be obtained anywhere. You tell the loan officer what you make and answer a few questions and the pre-qualification letter is supplied. Nothing has been verified and you get it with a simple phone call or visit to a website for on-line lending.
With a pre-approval letter the loan officer has taken your information, seen your credit score, checked your paperwork (yes, you must supply paperwork for this one) and verified that the information provided is accurate. In other words, you can actually get the loan in question.
Listing agents want a pre-approval when submitting an offer and most ask if you have a pre-approval before you even get in the door to show your client to home. If your client does not want to take the time to provide you with a pre-approval, chances are they are 'window shopping' and wasting your time. As an agent who works both the selling and buying side of the market, I require a pre-approval from my buyers. I also ask agents who call to show my listings if they have obtained a pre-approval from their clients. It is something I tell my selling clients up front that I will do, so they are not vacating their home for showings that do not have the possibility of turning into sales.
In all of this, my attitude is 'how would I like to be treated'? If I was selling a home, I would like to know that my listing agent was conscientious enough to be sure that my home was only shown to people who could actually purchase, not to those who want to see inside because they think they might want to purchase down the road.
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