What is the difference between a Pre-Qualified Buyer and a Pre-Approved Buyer? This is an important question for today’s home owners who are often looking at two or more contracts at the same time for the sale of their home. You as the seller want to make the best decision possible when considering the offers on your house.
A Pre-Qualified Buyer has done the preliminary paperwork with their lender to get a pre-qualified letter. This letter states in laymen terms:
- The borrower earns enough money for a loan up to X$
- The borrower has a credit score high enough for lender requirements
- The borrower has listed their debt obligations and are low enough for home loan
- Borrower needs to provided documentation for all the above
- Underwriting will need to review documentation to approve loan
- Underwriting will have to order and review home appraisal
A Pre-Approved Buyer has done ALL the paperwork for lender, Loan Approval States:
- Underwriting has review and approved borrowers Debts, Income, and Assets
- Underwriting has approved Loan for X$
- Borrower has 35 Days to Close on Loan
- Property needs Appraisal and Underwriting Review
As you look at the above options and you are comparing a borrower who is on Step one of the process with their Pre-Qualification Letter or the borrower with their Pre-Approval Letter and one of the last steps. I trust it is easy to see a Buyer who has a pre-approval is a stronger buyer than a buyer who just has a pre-qualification letter.
It is important to note that a pre-qualified Buyer is still 3-4 weeks away from a Loan Approval. The pre-approved Buyer is 7-14 days away from Loan Approval.
We trust this will help those For Sale By Owners in Greenville, Simpsonville, Fountain Inn, and surrounding areas who maybe considering hiring a Realtor to help get your home sold.