Steve Andre

Steve Andre
Phone: 510.552.5572
Office: 510.580.6991
Fax: 510.744.3530
License #: 01371685







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    Pre-Qualifed vs. Pre-Approved
    Pre-qualified or pre-approval is the seller's assurances that the buyer has the capacity to execute any contract they enter and will more than likely complete the transaction. It also allows your real estate agent to know that you are a qualified buyer, and what price homes to be searching out for you. The distinction between "pre-qualified" and "pre-approved" is an important one.

    PRE-QUALIFIED - means you have been asked by a lender a series of questions concerning your employment history, income and debt status and other financial considerations, like savings accounts, etc. Based on the answers to these questions the lender will compute your debt to income ratios and determine what price loan you will be able to qualify for.

    PRE-APPROVED     - means you have done the above plus you have paid for a credit report, submitted pay stubs, W2's and bank statements to your lender to have you credit, income and employment verified (see What You'll Need). Getting pre-approved can be done relatively quickly, ranging in time from a few hours to a day or two, depending on circumstances. Your lender will then issue a letter or certificate to your buyer agent, that he/she in turn presents to the seller at the time of the offer, displaying that you are an approved buyer. What this tells the seller is that you are not a financial risk to buy this house. What this means to you is that it puts you in a better or stronger negotiating position.  Always opt for pre-approval. You will be required to do this within a specific number of days after your offer is accepted. Therefore, it's in your best interest to do it before you make an offer, putting you in a stronger position of acceptance or negotiating.

    In conclusion    , it is important for you to know and understand that most sellers, agents and banks consider pre-qualification of no real value and will only accept Pre-approvals.

    Multiple offers are not uncommon in the SF Bay Area (even in these unusual times). When sellers have more than one offer to consider price is not always the deciding factor. For example, if you offer, $2,000-$5000 less than another party and you are approved, they are not, I can typically use this situation to your advantage.  Depending on the seller's reason to move, a "sure thing" is worth more than a "maybe".