I have been running across an interesting dilemma and I was wondering what the majority of you Realtors are doing about this. When do you order your appraisal and home inspection in regards to your buyers status with the loan process. In other words, is a pre-approval good enough to ensure that your client will fulfill all their qualifications and obtain their loan. Otherwise, the money spent on Appraisals and home inspections will be lost......we won't talk about the deposit because that is a huge subject in itself.
I ran this dilemma across my broker and we agreed that it is a delicate balance on protecting your customers money and fulfilling the necessary requirements in a timely manner. In this one particular case, I have a client who has pre-qualified but the lender advises they still need a lender approval (huh?)
So I challenge you all to question what is a "Pre-Approval" or a "Underwriting Approval" or "Pre-Qual" because in my case, I had all 3 approvals and the loan officer still said..."I have to get the official Underwriters Approval" that comes directly from the lender. Man talk about confusing. So, in the mean time the clock is ticking and we have inspections to perform. And guess what....you guessed it.....the lender came up with a condition that the buyer could not meet.
Again....we had a "Pre-Approval", "Pre-Qual", "DU Approval" and still the buyer did not qualify. Now what, the buyer has paid for: An application fee, Appraisal, and home inspection....this sucks!
So my dear colleagues. Do your do diligence, protect your buyer and work closely with the loan officers. And remember: A prequal is only that!
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