Why an accurate Pre-Approval is so important.

Real Estate Agent with HomeSmart SA541769000

In today’s hot real estate market sellers are often getting multiple competing offers. When this happens, the seller must choose the best offer. But the best offer is not always the highest sales price. Sellers must look at all factors of the offer. After all, the goal is not only to get the highest dollar amount but to ensure a smooth transaction that will result in the greatest net to the seller.

In Arizona, the typical pre-approval form contains several components.

  •          Buyer is/is not relying on the sale of a previous property
  •          Buyer is/is not relying on seller concessions
  •          Buyer can qualify for a loan amount of $____
  •          Buyer can qualify for a monthly payment of $____
  •          Interest Rate not to exceed ____%


These items along with the status of the buyer’s loan application can give the seller a fair picture of the buyer’s ability to complete the sale. If it is accurate.

I recently had a property that was listed in a hot area and received 4 offers in a 24 hours period. Several of the offers were for over list price. But when we examined both the terms of the offer and the Buyer’s Pre-Approval documents I recommended to my client to negotiate with one that was actually one of the lower priced offers.

The rationale was simple. Based on the pre-approval documents this buyer was the best qualified. All of the offers required a seller contribution towards the buyers closing costs, but the one we chose clearly stated that the buyer was both qualified for an amount higher than the purchase price and that they were NOT relying on the seller concession to qualify. However, after confirming with the buyer’s agent and lender we found out that the pre-approval was inaccurate and that the buyer could not qualify without a large seller concession. When I asked the buyer’ agent why they presented an inaccurate pre-approval, I was met with silence. In fact, I don’t think the buyer’s agent even took the time to review it or verify the information with the loan officer.

Fortunately, for my seller, we had several other offers and chose another offer. We are on our way to completing the sale. This buyer missed out on a great house simply because they could not perform as promised.

Having an accurate pre-approval is critical to having your offer chosen in this tough seller’s market. It could make the difference between getting your offer accepted or losing out to another better-qualified buyer.


Joe Domino is a Realtor® serving the Phoenix & Scottsdale metro area. You can find more great information by visiting his website at www.Scottsdale-AZHomes.com

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William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.

I have seen where the buyer thought they could get the laon and find out that the pre-approval was wrong.

Jun 05, 2018 03:25 PM #1
LaShonda Solomon
Atlanta Communities Real Estate Brokerage - Kennesaw, GA
Serving Cobb, Paulding, Douglas, Bartow Counties

I had a buyer with a pre-approval from a large bank.  I had spoken with the lender once intially.  It took us several months to locate a home.  The buyer decided to go back to the lender to see if they could increase the preapproval price.  The loan officer advised my client that the previous loan officer (with the same company) made a mistake in her approval and that she was not approved at all.  He also mentioned that they had fired the loan officer.  That did not help my client.  This is why i have preferred lenders that I work with.  My lender was able to get my client approved and she is still enjoying her home today.  

Jun 05, 2018 08:36 PM #2
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