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Pre-qualification or Pre-approval?

By
Real Estate Agent with La Entrada Realty

Real Estate Corner...

•Q.    We entered into a contract with someone who wanted to buy our home.  The agent representing the buyer presented us with a "pre-qualification" letter from a lender.  Today we discovered the buyer was rejected for financing.  How can this happen?

•A.     You allowed the term "pre-qualification" to lull you into a false sense of security.  The loan amounts referenced in pre-qualification letters are conditional on verification of income, employment, funds on deposit, credit report, and more.  A lender can issue a pre-qualification letter after just a simple 10-minute phone interview with a prospective purchaser.

As a seller, your best vehicle for peace of mind would be a pre-approval letter accompanying the offer to purchase.  A pre-approval letter is a firm commitment to lend money and is issued only after verification of the crucial financial items mentioned above. 

If you're thinking of selling your home in the next year, please call me at <<your number>> for important information that could save you thousands in the process, and avoid unwanted surprises like the sellers above experienced.

AND... if you're thinking of buying or selling, and you just need a little helpful "guidance," order one of my Free Consumer Reports highlighted in my Free Consumer Resources page inside this newsletter.