Pre-Qualified vs. Pre-Approved: What does this mean when you’re buying your Albuquerque home?

Pre-Qualified vs. Pre-Approved: What does this mean when you’re buying your Albuquerque home?

(Transcript Snippet): “Tracy:

So what was the buyer question we had this week?

Tego:

So the buyer question of the week, and this, this is something that comes up always in forever in real estate is amen. Is it? Yeah, yeah, yeah. Um, is being pre-qualified or pre-approved. And so in the, in the traditional, you know, real estate getting alone, um, uh, process, when you put in an offer on a home and the is going to want to see that you are a qualified buyer, meaning either you have cash in the bank or you have a loan, that’s been, um, you know, th that’s that’s ready to go, or you’ve been pre-approved or pre-qualified. So there’s the thing. Yeah. The thing that comes up Tracy is they’re not the same pre-approved versus pre qualified. And so what let’s just talk about that, Tracy. So what is pre pre-qualified mean?

Tracy:

Uh, prequalification is, is basically saying that the loan application has been made, right. That a credit report has been pulled and reviewed by a lender that, um, the,

Tego:

Yeah, actually, you know what Lee, can I just say there’s I think we need to make this point that a lot of people use the term pre-qualified and pre-approved interchangeably and in, in, and the thing that’s interesting in our purchase agreement, it says qualified, but they actually haven’t been there. There’s the pre-approval. So there’s very specific criteria, right?

Tracy:

The very specific criteria that our purchase agreement says to show that you have a lender who’s already reviewed your information and says you’re solid is very different, right? A lot of times we get a letter along with an offer and it says, Hey, this person’s pre-approved based on the information. The person told us on the phone or whatever. Um, they, they should qualify for the loan, but they haven’t checked their credit score. They haven’t verified their employment. They haven’t verified their assets, their bank statements, their w you know, their tax returns. They’re just saying based on what they told me, they should be able to buy a house for this amount. So as a home seller, how would you feel right? If you get this offer and you get a letter from a lender that says, well, they appear to be qualified to buy this house for this amount of money, but I haven’t checked anything.

Tracy:

They told me, right. Versus being a home seller, and you get a letter that says, I’ve already checked their employment. I’ve already checked their bank account. I’ve already looked at their taxes. I’ve already pulled their credit score. And I feel solid in putting my name on this letter that says they can afford this much house. Which buyer do you want to go with? The one who’s already got the lender. Who’s done all the work ahead of time, or the one who got a phone call. And the client said, Hey, this is how much I make. And they haven’t done any of the due diligence yet.

Tego:

Yeah. So one of the things, you know, as a, as a buyer is it, it’s actually, you know, if you have a good credit score and, you know, you’ve got a steady job, it’s relatively easy to get one of these letters that say that you’re pre-qualified right. And, but if you, if you really know that you’re going in and you want to be a strong buyer and you more than likely maybe there’s competition based on the current market conditions, that that may be the case, getting that full pre-approval is, is a big deal. Um, and, and the last thing on that is getting a local lender that has a reputation to protect, um, that does carry a lot of weight,

Tracy:

Uh, a big crash and burn last week. And it was out of area lender. You know, one of those online put your information in, and it turns out what they had said they could do wouldn’t work at all for this particular buyer. It was one of those where the buyer had gone in online and put in their basic information. It spit out a letter. They wouldn’t under contract. They prepaid for their appraisal. And they got down the road before that lender actually started doing the verification of everything. And they said, oh, you don’t qualify. So the sellers already made plans. They’ve already hired movers. They’ve already spent money that they’ve locked in the buyer’s out inspection money and appraisal costs. So they’re already out about $1,500 or more. And, you know, it’s just, it’s just not good. You know, you need that local person to talk to that can really look at your situation.

Tracy:

So I had a house listed, um, recently, but about three weeks ago, we went active and we got offers the first weekend and went under contract, but was interesting to me because we had multiple offers on the property to read the different lender letters that came with the offers. And there was the, you know, the online people you see on TV all the time, do it online. We’ve got an app and blah, blah, and it’s so simple to get money, um, versus local versus the letter that said, we’ve already reviewed everything. We’ve already looked at it. This person’s already been on our system for 30 days or more. We’ve already checked taxes. We’ve already looked at the bank statements. Um, that person is who got the house. You know, there was a lot of, it’s not just, who’s going to offer the most money it’s, who’s going to really be able to follow through on the contract. Right.

Tego:

It’s actually going to bring this thing all the way to closing. Yes, yes. And just so people know, uh, about 25 to 30% of, of homes that, that do go under contract or go pending end up falling out for whatever reason, many times it’s, it’s through the repair in, or excuse me, inspection and kind of repair negotiations. Uh, in many times, it’s, it’s the lender piece. Those are the two big reasons. Appraisals, uh, have been challenging to say the least in the last year or so, just because of the way, um, prices have been. Um, so yeah, just some really good tips there, I think for, for buyers is to be a strong, qualified buyer, ready to go and put your best foot forward.

Tracy:

Right. So to go, we had this, um, we have very often people call us and they want help finding a house, but they have this fear of being sold something, right. It’s like they call and they want help, but they don’t want to tell us too much. Right. And it’s like, they have this fear of being sold. I think about, you know, when I walk into a store and if the sales person says to me, um, can I help you? I always go, no, but if they say, what brought you in today? I go, oh, well, I’m looking for jeans or whatever. Right. Yeah. Versus, you know, just the whole approach. But for us, when people call us, because they need real estate help, we can’t sell them something they don’t want to buy. Right. And I’m not going to be able to talk someone into a house that’s not the right house for them.

Tracy:

So the more information we can get from those clients, the better to better serve them and help them get the right property. Right. So it’s, it’s kind of, it’s a hard place to be because a lot of people call, they don’t know what to say. They haven’t bought a house or they haven’t bought a house in a long time. And it’s, it’s scary. Right? Yeah. It’s it’s but you know, call us, let’s sit down, let’s talk about the process. Let’s help you with that lending piece. If you need a lender and if your cash let’s get that paperwork together to show that you have cash available. And, um, and we can help you with that.

Tego:

You know, th there’s, I just want to say something on that, Tracy. Cause there’s so many things we think about, you know, you and I have been doing this a long time now. Right. And we’ve seen thousands of, of home sales over the years. And you know, there’s so many little things that you just don’t know and you’re, you know, it’s that whole saying, you know, you don’t know what you don’t know. Right. And then suddenly if you’re buying a house or selling a house, all of a sudden, there’s all these things you just don’t understand. And, and you know, don’t be afraid to ask the questions, right. You know,

Tracy:

Speaking of best way to get ahold of us,

Tego:

Uh, visit our website, welcome home. Maybe q.com. You can send us a message there or call us at (505) 448-8888.

Tracy:

So let’s talk.