Pre-Qualified And Pre-Approved Letter -Which One You Should Ask For?

In my previous blog, I talked about three main reasons why home sales fall apart. Unqualified buyer is one of them.

Most of the time, home sellers accepted offers without asking the question if the homebuyer is qualified or not. Then, the home seller only found out several weeks later that the homebuyer couldn’t get the mortgage loan. In this case, you not only have to let the buyer back off, but also have to refund the earnest money to the homebuyer.

In above case, seller didn’t check if the buyer was qualified. But, here is a seller who did ask the homebuyer’s pre-qualified letter from a lender. Later the home sale still fell apart because the homebuyer couldn’t get the loan approved. Why this happens?

The reason for this was that the homebuyer was not a real qualified one. A pre-qualified letter or pre-qual does not mean the homebuyer can get a loan. A pre-approved letter from a lender does.

Let’s look at how they are generated and you’ll know. A pre-qual is just a good faith estimate by a lender, which says that you are qualified for certain amount of mortgage loan. But it is not a binding documentation. The lender who generates the pre-qual letter may or may not verify your credit score and financial information. Therefore, in this case, a pre-qual letter is worthy nothing but a pierce of paper.

Lender does pre-qual all time because it is quick, informal, and also save money. While pre-approved letter requires lender to verify credit scores, credit history, incomes and any other financial information. It is formal and time consuming. If what you get from a homebuyer is a pre-approved letter, then you get a real pre-qualified homebuyer.

Therefore, in order to prevent a home sale falls apart, always ask for a pre-approved letter, NOT a PRE_QUAL LETTER, before you accept any offer.

For related home selling tips from my home selling blog, click following link:

Top 3 Reasons Why Home Sales Fall Apart and How To Stop It From Happening?
http://besthomesellingtips.com/2007/09/04/top-3-reasons-why-home-sales-fall-apart-and-how-to-stop-it-from-happening/#more-149

How To Write A Killer Classified Ad To Make Your Phone Ring Off The Hook?
http://besthomesellingtips.com/2007/08/08/how-to-write-a-killer-classified-ad-to-make-your-phone-ring-off-the-hook/

How To Prepare The Curb Appeal When Selling Your Home?
http://besthomesellingtips.com/2007/08/21/how-to-prepare-the-curb-appeal-when-selling-your-home/

 

 

 

 

 

 

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