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John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

PA for the win.  A PQ is worthless, and in the hands of the wrong loan officer, a PA is as well.  Really, it comes down to did the loan officer review credit?  Review income?  Assets?  Do they know the file?

 

A PQ letter shouldn't even exist in today's world.  Full credit review along with income/asset documentation should be the norm.

Sep 19, 2016 05:43 AM
Rainmaker
2,900,344
Richard Weeks
Dallas, TX
REALTOR®, Broker

I do know the difference.  I also know about not counting chickens until they hatch.  The only thing I want to hear is "clear to close".

Sep 19, 2016 04:53 AM
Rainmaker
2,979,402
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

There is a difference and a pre-approval from the right lender is money in the bank to me so long as the buyer doesn't do something stupid.

Sep 19, 2016 03:42 AM
Rainmaker
1,522,917
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Geneva Financial, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

Pre-Approval is stronger but neither supersedes the written sales contract terms

Sep 19, 2016 03:36 AM
Rainmaker
999,596
Corinne Guest
Corinne Guest, REALTOR® | Barrington Realty Company - Barrington, IL
Barrington Lifestyles

I can pre-qual someone based on what they tell me, which could be a pack of lies. Only a pre-approval carries any weight but a CTC is what we want.

Sep 19, 2016 07:00 AM
Rainmaker
1,207,217
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

Jody Bruns, CDLP, CMMU Thanks for intro to your post.

Sep 19, 2016 04:56 AM
Rainmaker
1,280,414
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

YES... I understand the difference and it is a huge difference! 

Sep 19, 2016 03:59 AM
Ambassador
2,344,789
Fred Griffin presently on Leave of Absence
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

  You said it... has the lender actually pulled their credit, seen their tax returns, etc.

Sep 19, 2016 03:40 AM
Rainer
178,690
Bob Betel
Allstar Home Mortgage, Inc. - Sweetwater, TN
President, Allstar Home Mortgage, Inc

PreApprovals are the way to go, but even on Prequalifications, I still pull a credit report. Need to know the FICO before I do anything.

Sep 19, 2016 09:02 AM
Rainmaker
4,873,359
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

there is a difference....we are listing agents and want to see a pre approval letter....and it's as good as the person who wrote the letter.... we like our own people to pre approve....and then if they are qualified, they can select another institution.... 

Sep 19, 2016 06:17 AM
Rainmaker
4,318,900
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Jody,

I agree with Sandy Padula and Norm Padula, JD, GRI NMLS#1483386   A

Sep 19, 2016 06:00 AM
Rainmaker
3,244,855
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

It depends on the lender.  

It depends on the borrower.

 

 

Sep 19, 2016 04:42 AM
Rainmaker
1,157,264
FN LN
Toronto, ON

It depends on many factors.

Sep 19, 2016 04:34 AM
Rainmaker
1,212,209
Ryan Huggins - Thousand Oaks, CA
www.HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I prefer pre-approval v. pre-qualed.  If I get a letter, the first thing I do is ask the lender if they've reviewed docs.  If not, I consider the form worthless.

Sep 19, 2016 10:22 AM
Rainer
302,079
Melissa Jackson
Citiwide Alliance Realty - Weatherford, TX
Helping You Make The Right Move

I prefer  pre approval between the 2.  

Sep 19, 2016 09:41 AM
Ambassador
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Yes I know the difference and a preapproval letter always has more weight than a prequalification letter. Of course it also depends who is writing the letter and what the quality and reputation of the lender is.

Sep 19, 2016 09:38 AM
Ambassador
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

A pre-approval is stronger, but that could also depend on the particular lender. I personally don't see the point of a pre-qual letter in today's market, nor whay a reasonable buyer would think this is a good thing and in their best interests

Sep 19, 2016 09:36 AM
Rainmaker
534,742
Tony Lewis
RE/MAX of Valencia (Hall of Fame) 30 year Valencia Resident - Valencia, CA
RE/MAX Valencia, Stevenson Ranch, Santa Clarita

A Loan Approval Letter has been required ever since the downturn in 2006 as has proof of funds.  The agent bringing in the offer needs to give the seller and listing agent confidence the loan will be completed in a timely manner.  Once again, reputation raise it's head.

Sep 19, 2016 08:15 AM
Rainmaker
1,507,415
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

A preapproval is supposed to be more worthwhile. I'm sure a LO can tell you the exact percentage of that being untrue.

Sep 19, 2016 07:26 AM
Ambassador
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Pre-Approvals used to be stronger before TRID. Nowadays, the lenders may not even have checked income and assets before they are writing a pre-approval.  

Sep 19, 2016 06:45 AM
Rainmaker
2,707,425
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Jody Bruns, CDLP, CMMU Preapproval is better.

Sep 19, 2016 06:43 AM
Rainmaker
1,367,327
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Jody Bruns, CDLP, CMMU Yes, I do know the difference. I prefer to initially get a pre-approval letter and bank on the lender commitment letter.

Sep 19, 2016 06:04 AM
Rainmaker
1,478,361
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

Since i'm quiet not a new in real estate, I guess I have a solid idea about the difference. 

Sep 19, 2016 05:27 AM
Ambassador
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Anna Banana Kruchten CRB, CRS 602-380-4886
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana!

We have a very specific pre-qual form the lender must fill out before the buyers submit an offer.  That gives us  a clear picture of what has been done to get the buyers 'truly' qualified.  Letters aren't worth a dime in my state.

Sep 19, 2016 05:16 AM
Rainmaker
3,172,300
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Pre-approval carries some weight, but a prequalificiation letter is based upon assumptions and no facts!

Sep 19, 2016 05:10 AM
Ambassador
1,491,565
John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Preapproval always trumps

Sep 19, 2016 04:53 AM
Rainmaker
730,490
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

It depends on how much research and verification the loan officer actually did before issuing the letter. They both have contingencies.

Sep 19, 2016 04:18 AM
Rainmaker
4,023,847
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

There are some lenders you wonder if if it is worth the paper printed.

Sep 22, 2016 12:04 PM
Rainmaker
383,277
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

I had this argument with a lender/seller a few years ago and discussed this with an attorney involved with our state forms. Our forms require pre-approval, but the terms prequalification and preapproval are used interchangeably. And the lender/seller admitted to me there were no industry standards. Everything is subject to the whims of underwriting. You really don't have true approval until underwriting says okay and the property appraises.

Sep 20, 2016 09:41 AM
Rainmaker
823,488
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Of course I know, I'm real estate agent -

Sep 20, 2016 12:47 AM
Ambassador
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Harry F. D'Elia
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

You explained this one in your blog--nice

Sep 19, 2016 10:37 PM
Rainmaker
2,943,544
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

It is worth the effort every time to have a pre approval. A pre qual letter may not be worth the paper it is written on. 

Sep 19, 2016 10:36 PM
Rainmaker
4,431,983
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

John has a good answer.

Sep 19, 2016 09:49 PM
Rainmaker
5,266,230
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thanks for sharing your link.

The reliability of the mortgage loan officer is the most important factor.

Sep 19, 2016 07:40 PM
Rainmaker
633,936
Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

I always require a PA.

Sep 19, 2016 06:52 PM
Rainmaker
3,049,971
Tony and Suzanne Marriott, Associate Brokers
BVO Luxury Group @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Richard Weeks nailed this one!

Sep 19, 2016 06:38 PM
Rainmaker
799,696
Diana Zaccaro
Tropical Beachside brokered by eXp - Cocoa Beach, FL
"The Accidental Blogger" Cocoa Beach, Florida

Pre-Qual = they have a pulse and can fog a mirror.

Pre-Approval is the only way to go.

 

Sep 19, 2016 03:40 PM
Ambassador
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Paul S. Henderson, REALTOR®, CRS
RE/MAX Northwest. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

I do my follow ups because I do know the difference...

Sep 19, 2016 03:25 PM
Ambassador
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

a prequal letter is in the same category as scott toilet paper... worthless

Sep 19, 2016 03:09 PM
Ambassador
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Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

The pre approval letter is the one that I like to see. A pre qual letter means the lender has only talked with the buyers and given them a preliminary approval based upon nothing much. 

Sep 19, 2016 02:19 PM
Rainmaker
443,466
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

A pre-qual only means you "talked" to a lender and you could have told the lender just about anything to get him/her to say "you look good".  But a pre-approval means you went to the next step by either uploading your required documentation on line or you physically met with the lender and started the process.  The PA letter is worth more than the PQ any day.  But still no guarantee.  You have to make it to the Loan Commitment and Closing!

Sep 19, 2016 01:49 PM
Ambassador
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Jody Bruns, CDLP, CMMU - of course, the listing agents want PRE-APPROVAL letter, lot different than pre-qualification letters.

Sep 19, 2016 12:15 PM
Rainmaker
3,765,828
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

It all depends on the lender..there are some letters I get that I know the buyer is golden because I know the lender..never varies from the truth.

Sep 19, 2016 12:07 PM
Ambassador
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Thanks for clarifying this Jody, but as we all know neither will prevent some buyers from blowing it before closing.

Sep 19, 2016 11:52 AM
Rainmaker
3,977,717
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Either shows me that the buyer is interested enough to see if they can affoard the property.  I follow all loans to make sure thay are progressing smoothly.

 

I have lost only 1 deal in the last 3 years

Sep 19, 2016 11:30 AM
Rainmaker
3,071,918
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

You wrote a great blog

 

Sep 19, 2016 10:37 AM
Ambassador
3,673,447
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

A prequalification letter is worthless because it is usually based on unverified information the buyer provides.  And a pre-approval letter is worthless if it is from a lender with a reputation for not delivering the funds at settlement.

Sep 19, 2016 10:26 AM
Ambassador
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Pre-approval is the only option in our market - pre-quals are worthless!  If my lenders write that pre-approval, you can bet the deal will Close!

Sep 19, 2016 09:44 AM
Rainmaker
4,796,551
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks.  I will read your post.

Sep 19, 2016 07:56 AM
Rainmaker
2,765,118
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

There is a difference.  The valus of anything written on paper is determined by a good vetting process.  

Sep 19, 2016 07:06 AM
Rainmaker
2,425,830
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Good post, question and hostess thank you Jody girl. Now, I get the difference and I recommend saving paper. Behind all docs are the people who make them come alive. Vette the people not the docs...

Sep 19, 2016 06:37 AM
Rainmaker
1,523,566
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

As a REALTOR I know the difference and explain it to my clients.

Sep 19, 2016 05:58 AM
Rainmaker
985,289
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

We do not even accept prequal letter. Sorry.....

Sep 19, 2016 05:18 AM