What Does a Pre-Approval Letter Mean To a Seller?

Reblogger Bob Miller
Real Estate Sales Representative with Keller Williams Cornerstone Realty

Michael does a great job distinguishing between the pre-qual and pre-approval letters.  Which do most of you Realtors require?  Do you show homes without at least one or the other?  We usually require at least the pre-qual.  If not on the first appointment, definitely on the second.

Original content by Michael Dunsky

In today’s world, home-buyers needs a pre-approval letter before any seller will take them seriously.

A buyer needs to be pre-approved before they can make an offer on a home because the pre-approval indicates they’ve been approved to afford a certain loan amount. The best real estate agents make sure their clients are pre-approved at the beginning of the home buying process.

It is also important to know that a pre-qualification letter is NOT equal to a pre-approval letter

A pre-approval letter means that the lender has independently verified your credit, income, and all the factors that are needed to determine a loan amount. The buyer has access to that loan when an offer on a home has been accepted. A pre-qualification letter is not an approval for a loan.

When you are pre-approved, there is very little that can stand in the way of you purchasing a home for the dollar amount you’ve been approved for.

michael dunsky

 

 

 

 

 

 

 

 

 

What Does a Pre-Approval Letter Mean To a Seller?

1. Your pre-approval letter will either give the seller reasons to accept your offer or to reject your offer. Make sure you are making offers on houses within the range of what you’ve been approved for.

2. Sellers and real estate agents feel more comfortable if the letter is from a local lender. If the agent can vouch for the mortgage lender than it makes a great impression on the seller who may be skeptical about pre-approval letters from non-local companies.

The pre-approval letter also let’s your real estate agent know what you can afford so they can find a home to fit your profile.

Remember that sellers need to see that you are pre-approved, not just pre-qualified. For more help with getting your own pre-approval letter, give us a call today at 508-528-1800.

 

  Michael Dunsky
Vice President of Mortgage Lending
 
P: (508) 528-1800
F: (508) 749-7695
Michael.Dunsky@guaranteedrate.com
guaranteedrate.com/MichaelDunsky
NMLS ID: 21372
 
38 Pond St, Ste 208 • Franklin, MA • 02038NMLS ID 2611
Licensing Information:http://www.guaranteedrate.com/licensing
 
         
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Rainer
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Tamara Elliott-Deering
Central Metro Realty - Austin, TX

Thank you so much I get these terms confused all the time.  Probably because pre-qualified sounds more impressive than pre-approved - another case of me overthinking things I guess.

Jul 28, 2012 10:45 PM #1
Anonymous
Alan Bercovitz

Until now Bob, a pre-approval was the gold standard, clearly better than a pre-qualification.  But now the Guaranteed Mortgage Quote is available, it goes way beyond a pre-approval.  The Guaranteed Mortgage Quote is a guarantee provided by the mortgage company to both the buyer and the seller.  If the mortgage fails to close due to an error made by the mortgage company, the mortgage company agrees to pay a financial penalty (an amount of money disclosed by the mortgage company when they issue their Guaranteed Mortgage Quote) to both the buyer and the seller.  I'd be happy to talk or email with you if you'd like more details.

Jul 28, 2012 11:13 PM #2
Rainmaker
846,257
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Thanks Alan.  We learned something new today!  That is why we love Active Rain!

Jul 28, 2012 11:22 PM #3
Rainmaker
846,257
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Thanks Tamara, but like I said to Alan, that is why AR is so great.

Jul 28, 2012 11:23 PM #4
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Rainmaker
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