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You are here: Home / Sellers / Not All ‘Buyers’ Are Able to Buy

Not All ‘Buyers’ Are Able to Buy

December 14, 2013 by John Sibley

Pre-Approval vs Pre-QualificationPre-Qualification vs Pre-Approval

When a Buyer provides a pre-approval or pre-qualification letter, do you know the difference?

Pre-Qualification Letter

Prospective Buyers will often present a Seller with a pre-qualification letter to demonstrate their ability to obtain financing.  However,  most sellers do not realize a pre-qualification letter is NOT the same as a pre-approval.

Receiving a pre-qualification letter simply means that the Buyer told the lender that they have good credit and make a particular salary.  If those facts are accurate and there are no other issues, it is possible that the Prospective Buyer may be approved for the loan.  However, since lenders do not verify this information, a pre-qualification letter is inherently much less reliable than a pre-approval.  It may incorrectly indicate a buyer is qualified for the loan when they are not.

Pre-Approval Letter

Sellers should always request a Prospective Buyer be “pre-approved”.   That means that the Buyer’s information HAS been verified through credit reporting agencies, third party information providers, and written documentation has been submitted to the lender.  If a Buyer has a pre-approval letter, they have met the basic requirements to qualify for a mortgage in the amount specified.  Provided that the Buyer’s financial status and credit report remains substantially the same until the loan closes, they would qualify for the specified loan product.

As your Realtor, we always get a copy of the Buyer’s pre-approval, and we will call the lender to verify the terms of the pre-approval. However, this does NOT mean the buyer is 100% guaranteed to get the loan.  Until the lender provides a loan commitment, issues can still arise.

Loan Commitment

The loan commitment is the closest thing to a 100% guarantee for financing that a lender will provide.  Before providing a loan commitment, the lender must perform an appraisal, title work, and final underwriting for the property being financed.  This process normally takes four to six weeks and does not begin until the Buyer has an accepted contract to purchase the property.   As your Realtor we will communicate with the Buyer’s lender to ensure that the loan commitment is on schedule and will be provided at least three days prior to closing or sooner if circumstances require additional time (i.e., moving, purchase of new home, etc).

If you are a prospective buyer looking to get your pre-approval, we have a network of mortgage professionals that can help you get pre-approved today!

 

Filed Under: Sellers

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John Sibley came highly recommended by a neighbor and he sold our house not only once but twice! A pipe burst upstairs and flooded the house and the first sale was cancelled. We were out of town and John and his staff handled everything from informing us of the problem to working with the adjusters giving them access to the house. When we got back in town just three days later, the damage was already cleaned up and we were ready to begin the repairs!

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We were very happy with the service provided. As first time home buyers, we were initially anxious, however, John and the rest of the group helped us understand the home buying process and what to expect. They made sure we were well prepared by the closing and that our interests were top priority.

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John was great to work with. He provided good sound advice relative to marketing our home. He kept me informed through every step of the process from the initial listing to the closing. It was a great experience and I recommend the Sibley Group to anyone interested in purchasing or selling real estate property.

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John Sibley and Lana Sibley Leonard were very instrumental in marketing my home both personably and professionally. Their drive and incentive made it possible for my home to sell in a quick, timely manner.

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Everyone throughout the process was extremely helpful. Dianna spent a lot of time, including late hours helping us find the right house.

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John & company were always negotiating on my behalf and won the battle such as letting me have an Estate Sale w/o charging me rent for one week and then the new owner moved in. The Sibley Realty Group was always professional in every way.

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Anonymous, Slidell, LA
 

Sibley's group is the best we've used.

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Cathy & Will, Slidell, LA
 

John and the Sibley Realty Group had a great command of the market prices and an excellent marketing strategy to get new groups of people to look at our property. By using new technology to market to different buyers and target new groups of potential buyers the Sibley Realty Group met our goal of selling within 3 months. The entire office helped make the transition smooth and Lauren is very helpful making sure everyone is on the same page as you go through the closing process. It is good t(...)

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Sibley Group delivered as promised.

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We are extremely grateful to have found Sibley Realty group. Initially I had called other realtors who were not so responsive since we did not live in the area. Jordan contacted me back right away and made us feel at ease with our first home purchase. We lived 7 hours away from where we were buying and Jordan was very accomendating to our schedule of only being able to make it down on the weekends. The whole office are a bunch of true professionals that we owe more gratitiude to then we can(...)

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The Sibley Group
Keller Williams Realty 455-0100

3197 Richland Ave, Metairie, LA 70002

Northshore: 985.326.9755
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