Many loans fall through even though the borrower has been pre-qualified. Pre-approval is a different story. Pre-approval means all the information has been verified and the lender has agreed to make the loan subject only to the title report and appraisal of the new property. When you get pre-approved first, the lender will give you a letter stating the loan amount that you are approved. When shown to a seller, the letter makes the seller feel more comfortable and will greatly strengthen your offer and negotiating position.
Buyers tend to believe that price is the most important part of the offer.
Price is very important to sellers, but it is only one piece of the offer. The strength of the buyer is equally, if not more important in the eyes of a seller. From a seller s standpoint, a perfect offer would be all cash with no contingencies. However, most buyers can t pay all cash and lenders definitely won t loan money to a buyer until there is an accepted purchase contract. Pre-approval is the next best thing to all cash.