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Ambassador
1,076,551
John Meussner
Mortgages in AZ, CA, CO, DE, FL, GA, IN, MD, MN, MT, NC, NJ, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI - Fair Oaks, CA
#MortgageMadeEasy Fair Oaks, CA 484-680-4852

PA for the win.  A PQ is worthless, and in the hands of the wrong loan officer, a PA is as well.  Really, it comes down to did the loan officer review credit?  Review income?  Assets?  Do they know the file?

 

A PQ letter shouldn't even exist in today's world.  Full credit review along with income/asset documentation should be the norm.

Sep 19, 2016 05:43 AM
Rainmaker
4,882,355
Richard Weeks
Dallas, TX
REALTOR®, Broker

I do know the difference.  I also know about not counting chickens until they hatch.  The only thing I want to hear is "clear to close".

Sep 19, 2016 04:53 AM
Rainmaker
5,104,931
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

There is a difference and a pre-approval from the right lender is money in the bank to me so long as the buyer doesn't do something stupid.

Sep 19, 2016 03:42 AM
Rainmaker
1,725,996
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Pre-Approval is stronger but neither supersedes the written sales contract terms

Sep 19, 2016 03:36 AM
Rainmaker
1,231,853
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

Jody Bruns, CDLP, CMMU Thanks for intro to your post.

Sep 19, 2016 04:56 AM
Ambassador
2,178,603
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

YES... I understand the difference and it is a huge difference! 

Sep 19, 2016 03:59 AM
Ambassador
2,684,109
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

  You said it... has the lender actually pulled their credit, seen their tax returns, etc.

Sep 19, 2016 03:40 AM
Rainer
225,526
Bob Betel
Allstar Home Mortgage, Inc. - Sweetwater, TN
President, Allstar Home Mortgage, Inc

PreApprovals are the way to go, but even on Prequalifications, I still pull a credit report. Need to know the FICO before I do anything.

Sep 19, 2016 09:02 AM
Rainmaker
5,583,278
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

there is a difference....we are listing agents and want to see a pre approval letter....and it's as good as the person who wrote the letter.... we like our own people to pre approve....and then if they are qualified, they can select another institution.... 

Sep 19, 2016 06:17 AM
Rainmaker
5,772,575
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Jody,

I agree with Sandy Padula and Norm Padula, JD, GRI NMLS#1483386   A

Sep 19, 2016 06:00 AM
Rainmaker
4,572,289
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

It depends on the lender.  

It depends on the borrower.

 

 

Sep 19, 2016 04:42 AM
Rainmaker
1,157,785
FN LN
Toronto, ON

It depends on many factors.

Sep 19, 2016 04:34 AM
Rainmaker
1,502,998
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I prefer pre-approval v. pre-qualed.  If I get a letter, the first thing I do is ask the lender if they've reviewed docs.  If not, I consider the form worthless.

Sep 19, 2016 10:22 AM
Rainer
321,564
Melissa Jackson REALTOR
Trinity Premier Properties - Azle, TX
Helping You Make The Right Move

I prefer  pre approval between the 2.  

Sep 19, 2016 09:41 AM
Rainmaker
3,988,007
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Yes I know the difference and a preapproval letter always has more weight than a prequalification letter. Of course it also depends who is writing the letter and what the quality and reputation of the lender is.

Sep 19, 2016 09:38 AM
Ambassador
5,049,466
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

A pre-approval is stronger, but that could also depend on the particular lender. I personally don't see the point of a pre-qual letter in today's market, nor whay a reasonable buyer would think this is a good thing and in their best interests

Sep 19, 2016 09:36 AM
Rainmaker
763,883
Tony Lewis
Summit Real Estate Group - Valencia, CA
Summit Real Estate Group Valencia & Aliso Viejo

A Loan Approval Letter has been required ever since the downturn in 2006 as has proof of funds.  The agent bringing in the offer needs to give the seller and listing agent confidence the loan will be completed in a timely manner.  Once again, reputation raise it's head.

Sep 19, 2016 08:15 AM
Rainmaker
1,844,301
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

A preapproval is supposed to be more worthwhile. I'm sure a LO can tell you the exact percentage of that being untrue.

Sep 19, 2016 07:26 AM
Ambassador
3,383,334
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Pre-Approvals used to be stronger before TRID. Nowadays, the lenders may not even have checked income and assets before they are writing a pre-approval.  

Sep 19, 2016 06:45 AM
Rainmaker
4,160,899
John Pusa
Glendale, CA

Jody Bruns, CDLP, CMMU Preapproval is better.

Sep 19, 2016 06:43 AM
Rainmaker
1,466,207
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Jody Bruns, CDLP, CMMU Yes, I do know the difference. I prefer to initially get a pre-approval letter and bank on the lender commitment letter.

Sep 19, 2016 06:04 AM
Rainmaker
1,622,432
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Since i'm quiet not a new in real estate, I guess I have a solid idea about the difference. 

Sep 19, 2016 05:27 AM
Ambassador
3,587,960
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

We have a very specific pre-qual form the lender must fill out before the buyers submit an offer.  That gives us  a clear picture of what has been done to get the buyers 'truly' qualified.  Letters aren't worth a dime in my state.

Sep 19, 2016 05:16 AM
Rainmaker
5,216,409
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Pre-approval carries some weight, but a prequalificiation letter is based upon assumptions and no facts!

Sep 19, 2016 05:10 AM
Rainmaker
1,661,936
John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Preapproval always trumps

Sep 19, 2016 04:53 AM
Rainmaker
911,338
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

It depends on how much research and verification the loan officer actually did before issuing the letter. They both have contingencies.

Sep 19, 2016 04:18 AM
Rainmaker
5,868,554
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

There are some lenders you wonder if if it is worth the paper printed.

Sep 22, 2016 12:04 PM
Rainmaker
711,852
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

I had this argument with a lender/seller a few years ago and discussed this with an attorney involved with our state forms. Our forms require pre-approval, but the terms prequalification and preapproval are used interchangeably. And the lender/seller admitted to me there were no industry standards. Everything is subject to the whims of underwriting. You really don't have true approval until underwriting says okay and the property appraises.

Sep 20, 2016 09:41 AM
Rainmaker
989,652
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Of course I know, I'm real estate agent -

Sep 20, 2016 12:47 AM
Rainmaker
1,617,916
Harry F. D'Elia III
WEDO Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

You explained this one in your blog--nice

Sep 19, 2016 10:37 PM
Rainmaker
3,416,038
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

It is worth the effort every time to have a pre approval. A pre qual letter may not be worth the paper it is written on. 

Sep 19, 2016 10:36 PM
Rainmaker
4,434,127
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

John has a good answer.

Sep 19, 2016 09:49 PM
Rainmaker
7,836,419
Roy Kelley
Retired - Gaithersburg, MD

Thanks for sharing your link.

The reliability of the mortgage loan officer is the most important factor.

Sep 19, 2016 07:40 PM
Rainmaker
634,482
Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

I always require a PA.

Sep 19, 2016 06:52 PM
Rainmaker
3,071,489
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Richard Weeks nailed this one!

Sep 19, 2016 06:38 PM
Rainmaker
1,090,922
Diana Zaccaro Broker Associate
ZOOM Realty Group - Cocoa Beach, FL
"The Accidental Blogger" Cocoa Beach, Florida

Pre-Qual = they have a pulse and can fog a mirror.

Pre-Approval is the only way to go.

 

Sep 19, 2016 03:40 PM
Rainmaker
4,272,548
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

I do my follow ups because I do know the difference...

Sep 19, 2016 03:25 PM
Ambassador
3,164,294
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

a prequal letter is in the same category as scott toilet paper... worthless

Sep 19, 2016 03:09 PM
Rainmaker
2,224,473
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

The pre approval letter is the one that I like to see. A pre qual letter means the lender has only talked with the buyers and given them a preliminary approval based upon nothing much. 

Sep 19, 2016 02:19 PM
Rainmaker
679,404
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

A pre-qual only means you "talked" to a lender and you could have told the lender just about anything to get him/her to say "you look good".  But a pre-approval means you went to the next step by either uploading your required documentation on line or you physically met with the lender and started the process.  The PA letter is worth more than the PQ any day.  But still no guarantee.  You have to make it to the Loan Commitment and Closing!

Sep 19, 2016 01:49 PM
Rainmaker
4,319,419
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Jody Bruns, CDLP, CMMU - of course, the listing agents want PRE-APPROVAL letter, lot different than pre-qualification letters.

Sep 19, 2016 12:15 PM
Rainmaker
5,005,659
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

It all depends on the lender..there are some letters I get that I know the buyer is golden because I know the lender..never varies from the truth.

Sep 19, 2016 12:07 PM
Ambassador
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Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Thanks for clarifying this Jody, but as we all know neither will prevent some buyers from blowing it before closing.

Sep 19, 2016 11:52 AM
Rainmaker
3,986,258
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Either shows me that the buyer is interested enough to see if they can affoard the property.  I follow all loans to make sure thay are progressing smoothly.

 

I have lost only 1 deal in the last 3 years

Sep 19, 2016 11:30 AM
Rainmaker
4,936,705
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

You wrote a great blog

 

Sep 19, 2016 10:37 AM
Ambassador
3,727,873
Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

A prequalification letter is worthless because it is usually based on unverified information the buyer provides.  And a pre-approval letter is worthless if it is from a lender with a reputation for not delivering the funds at settlement.

Sep 19, 2016 10:26 AM
Ambassador
5,230,119
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

Pre-approval is the only option in our market - pre-quals are worthless!  If my lenders write that pre-approval, you can bet the deal will Close!

Sep 19, 2016 09:44 AM
Rainmaker
4,800,082
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks.  I will read your post.

Sep 19, 2016 07:56 AM
Ambassador
3,345,091
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

There is a difference.  The valus of anything written on paper is determined by a good vetting process.  

Sep 19, 2016 07:06 AM
Rainmaker
2,781,173
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Good post, question and hostess thank you Jody girl. Now, I get the difference and I recommend saving paper. Behind all docs are the people who make them come alive. Vette the people not the docs...

Sep 19, 2016 06:37 AM
Rainmaker
1,525,616
Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

As a REALTOR I know the difference and explain it to my clients.

Sep 19, 2016 05:58 AM
Rainmaker
1,239,901
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

We do not even accept prequal letter. Sorry.....

Sep 19, 2016 05:18 AM