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Attention Buyers.. Don't Waste Your Time Getting "Pre-Qualified"

ATTENTION BUYERS  ..  Don't waste your time getting "Pre-Qualified"


I am sure there is an argument out there as to why you SHOULD get pre-qualified, but here is my thought... and pay attention buyers...

Do you want to get the best house you can for the least amount of money? Of course you do. In order to make this happen, you have to put yourself in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. When a seller is looking over multiple offers, there can be other terms that will help place you into the right position to get the offer accepted. One such term is the strength of the buyer or the length of the escrow. These are critical to a seller.

In the past we have always recommended buyers get "pre-qualified" by a lender. This means you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lenders pronounces you "pre-qualified" and issues you a certificate that you can show to a seller. Well, sellers (and certainly Listing Agents) are aware that such certificates are WORTHLESS and here's why! None of the information is verified!

Often what happens is that unknown problems surface! Problems that I have personally seen are recorded judgments, child support payments due, glitches on the credit report due to a large variety of reasons (both accurate and inaccurate) and even down payments that have not been in the clients' bank account long enough. These are just a few examples of what could go wrong to turn your 'pre-qualified' letter into just another recyclable paper.

The way you make a strong offer today is to get "pre-approved". This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few minutes to a few days, depending on your situation and the availability of your supporting documentation (bank statements, paystubs, tax returns, etc.)

This process is VERY POWERFUL and a weapon we recommend all of our clients have in their negotiating arsenal.

So.. do you HAVE to get a "Pre-Approval" letter or even a "Pre-Qualification" letter before shopping for a home? Of course not... but don't you want to know how much money I can lend you? I would never recommend shopping for anything and making an offer on an item without knowing how much money you have in the bank. Shopping for a home without knowing what you can afford is like writing a check and hoping that is clears the bank. Take the time to contact a mortgage professional who will consider all factors such as Insurance, Taxes, HOA dues, MIP/PMI, in addition to your other monthly obligations (credit cards, auto payments, cable bills, etc.).


Are you "Pre-Approved" or just "Pre-Qualified"?




Are you looking to purchase a Texas home?  Perhaps you love your Texas home but would be interested in refinancing your Texas mortgage to a lower interest rate?  

I'll help you get pre-approved for your Texas home loan and even suggest some very knowledgeable and professional Real Estate Agents in your area of choice.  If you are available to talk, I am available to listen.  Give me a call or visit my website for more details.

Do you want to know all of your mortgage options? Call me today and let's discuss them further.

Texas Home Loan Consultant

Always available for your Texas Mortgage and Home Loan needs!

John R Cannata    P#214.728.0449

NMLS # 322646

Texas Home Loan Expert

Frisco TX Mortgage



The views expressed on this site are mine alone and do not reflect the views of my employer.

Comment balloon 12 commentsJohn Cannata • April 23 2010 01:32PM


Pre-qual does not mean squat yet some folks think it gives this leverage. I tell buyers - you want leverage? Get a loan aiapproval with the only detail remianing - find the house!

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) about 9 years ago

Great advice.  I always tell my clients to get a "pre-approval letter".  Anyone can make up a prequalification certificate, I get 10 to 20 in the mail each week. LOL

Posted by Larry Gray (Real Estate Consultant) about 9 years ago

Gary and Larry - Exactly. Its important that your buyers take the time and truly get approval. They can certainly buy a home without getting the letter, but they could be wasting their time if not qualified correctly by the agent. Some agents feel comfortable doing it, and I guess its their choice. If it does not work out, they will learn to get the borrower approved next time.

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 about 9 years ago

John - You are absolutely right, pre-approved is the only way to go these days.

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) about 9 years ago

Great reminder John!

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 9 years ago

Many do not know the difference.  Thanks for reminding us.  Important tool, if you have the right tool!

Posted by Marcia Hawken, Naples Luxury Specialist (WILLIAM RAVEIS ) about 9 years ago

Good advice John!  I posted this on my DFW Area Realtors Facebook page!

Posted by Brian & Marie Spray, Frisco TX Realtors ( - Action Realty Group) about 9 years ago

Hi Michelle - Just figured I would shed some light to newer buyers.

Thanks Greg.

Marcia - You are absolutely right. Most do not know there is a difference. They think its just one person saying pre-qualified, when they meant pre-approved. Wrong!

Thanks Brian!

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 about 9 years ago

As a listing agent you are dead on that if I see a pre-qualification letter and a pre-approval letter and all other terms are the same or close, the pre-qualification offer goes in the trash! (I've had way to many fail at the last hour)

Posted by Respect Realty LLC, Brokers - Oregon / SW Washington Real Estate (Respect Realty LLC) about 9 years ago

Thanks for the confirmation Todd. Thats my point exactly.

Congrats on the 1Mil Points!

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 about 9 years ago

Great Points John,

Been trying to make this comment for a couple of days :)

Have a great day


Posted by Leander McClain, Cecil & Harford County Realtor about 9 years ago

Hey Leander. I hope your point gets across to people.

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 about 9 years ago