This is a question I’m hearing every day right now:
What does pre-qualification mean?
Why am I hearing that question? Because I’m representing the seller in a house that is not closing, day after day.
So what does pre-qualification mean? Nothing.
What does loan qualification mean? It means the buyer has paid the loan application fee.
What does final underwriting mean? Hide and watch…
Seriously, pre-qualification often doesn’t mean very much. The buyer may have had a phone conversation with the lender. They may have discussed income and debt. The buyer’s credit may have been run. But other than the credit report, there probably has not been any tangible demonstration of the basis of the pre-qualification.
Lenders pre-qualify buyers because buyer’s agents ask for it.
Buyer’s agents ask for it because listing agents ask for it.
Listing agents ask for it because sellers ask for it.
Sellers ask for it because they think it means something.
Everyone else knows better…
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jf.sellsius says:
Pre-qualification is a marketing device.
September 26, 2006 — 6:47 pm