Would you be insulted if

[Smiling JOe]

You're absolutely right about that, but generally the pre-qual letters have the property address on them, and when working with a buyer, you don't want the seller aware of the buyer's top price.

I think Donna said it well. Just because the buyer can qualify for x amount doesn't mean they are willing to pay x amount for a particular property. As a buyer, I may qualify for a substantial loan, but that doesn't mean that I can afford it.

Typically, I pre-qualify my buyers before presenting an offer. I can have them pre-qualify within 15 minutes after a two minute phone call. Most buyers are more than willing to show that they are serious, and I question the ones who are not so willing. I like to present strong offers and pre-qual letters do help, however, they are, as someone mentioned here, not quite as good as the paper upon which they are written. Even pre-approval letters are not set in stone. A buyer can have other things change in their financial life within the typical 30-40 day close, and thereby not get the loan. Also, if a property doesn't appraise, the bank is not giving the loan on the agreed sale price, thereby releasing the buyer from the contract in many instances (depends on the number of days to obtain financing, written in the contract).

Franny, I know that you know the above info, but I am sharing with those who may not. ;-)

 

[Franny]

Good points. Thanks for all the great information and insight. We had an incident last year where a buyer brought a very strong contract and had the means to purchase according to the mortgagge broker but did not like paying their bills and would never qualify. This cost us a good month and a lot of frustration so now you know... the rest of the story!

 

[Cork On the Ocean]

Franny, I'm guessing that you didn't have a pre-qual from that buyer and think that the situation might have been different if they did but the reality is they probably would have presented one and still busted. As Joe and Bob said, pre-quals don't mean a lot. My ex-hubby is a good friend and a mtg broker and I place virtually no value in pre-qual letters. It's liars poker at that point, nothing is confirmed except perhaps the FICO. When it's time to cough up the documentation and right up to the clear to close, they can bust.

Requiring one shouldn't be a problem if you want one with a contract because if the person is serious they'll produce it. $10K EMD however, also shows they're serious. But when people want a pre-qual to show the house, I think that's unwise and significantly decreases the property's exposure.

 

[Franny]

That is very true Cork and I agree with the EMD statement but if they do not qualify they get it back anyway. And I strongly agree that showing a property should not require a pre-qua letter..that would be a big turn off!

 

[SHELLY]

And I strongly agree that showing a property should not require a pre-qua letter..that would be a big turn off!

....But it certainly keeps the Lookie-Lou's from soiling the "Welcome" mat.

 

[Franny]

....But it certainly keeps the Lookie-Lou's from soiling the "Welcome" mat.

Hey the more the merrier. Those lookie-lou's could be a future buyer!