By Lender's Standard, Is A Buyer Really Prequalified Even if.....

Goodness!  I would hope that this would not be a situation where someone is considered pre-qualified.  That just would shoot any remaining credibility we have in pre-qual letters!  Parking to see lender reponses....

WOW! I am waiting to see what the comments reveal. I too am worried about the effect on pre qual letters the answers have. My pea brain agrees with yours on your opinion.

I would agree with you, Charita, but in our wacky world of numbers manipulation anything can happen.  We just had an unusual one that had some of that shifting stuff around at the last minute.  It saved the say, but it was a close one.

Hi Charita - By now, I pretty much know which of my local lenders will give the wrong answers to your questions, and any buyers unlucky enough to be using them are treated with some suspicion. Maybe a bit unfair, but necessary.

Charita...that is why I prefer my buyers to use my preferred lenders who I know will not preaprove someone until these issues are cleared.  In fact, I have buyers working out such an issue right now BEFORE their lender will issue their preapproval.  Of course I cannot force anyone to use a specific lender so I could have some buyers who have just such a shaky preapproval and I would not know it.  But if I knew about it, I would not be showing them houses or submitting an offer.

Umm, that would be a NO for me....course, I am just an agent.  How sure are we that credit issues would be cleared up?  That is random..clear it up first, then pre-qualify/pre-approve, then come talk to me lol :)!

Charita:  The answer is yes ... and no.  Depending on the issue needing be resolved, I would issue a pre-qual letter ... with a contingency attached that the issue must be resolved to the satisfaction of underwriting.   The validity or strength of that pre-qualification rests solely on the strengths and abilities of the mortgage lender it is issued by and ... just how well that lender can orchestrate or navigate/direct the removal of the contingency involved.  Having a track record with the mortgage lender issuing the pre-qual ... or a knowledge of their success rate ...  will likely make an agent either satisfied that the transaction will proceed successfully ... or terribly nervous.  Obviously a pure pre-qual is desired, but depending on the property and number of offers received, a contingency pre-qual might be better than nothing.

Lots more could be written about the pros and cons of securing this type of pre-qualification, but that is my short answer in a nutshell ...

Gene

Exactly my point, Charita ... you express it beautifully.  As the scenario changes ... what lender ... buyer's circumstances ... seller's needs ... it can make a huge difference as to how you react in this case.  And I agree, your sellers would need to know the truth and the value of the offer prior to accepting it.  More proof that WHO you work with is vital to the success of the transaction ... and how smoothly it goes.  I do want to add that ... along with the contingency added to this pre-qual ... I am honest with my agent as to what it will take to get the contingency cleared and how likely that is to happen.  They then must move forward as they judge fit ...

It truly is teamwork that gets a transaction successfully closed these days, isn't it??

Gene