Buyers’ Lenders . . . & Sellers’ (Huh??)
What’s better than a Pre-Approval Letter from the home Buyer’s lender?
A Pre-Approval Letter from the home Seller’s lender.
Huh???
In fact, I really should say, “a lender known and trusted by the Seller’s listing agent.”
Protecting the Seller
When a Buyer shows up with a shaky Pre-Approval Letter from an unknown lender, the risk for the Seller is higher.
One way to mitigate that risk is by asking for more earnest money.
However, if that isn’t possible, plan B can be to require that the Buyer get qualified by a lender that the Seller does know.
Extra Hoops
There’s certainly no requirement that the Buyer use that lender (although that sometimes happens).
And Buyers may not be thrilled by such a requirement, which feels like the Seller is imposing extra conditions (they are).
But, if the alternative is not getting the home . . . serious Buyers usually comply.
P.S.: From the Buyer’s perspective, it’s much better washing out a weak Buyer up front, then going back on the market a month later when said Buyer’s Written Statement (signifying final underwriting approval) fails to materialize and the deal cancels.
See also, “You mean, there’s no deal AND they get their earnest money back?!?“; ““Guaranteed’ Pre-Approval Letters“; “The 2nd Most Important Date in a Home Sale“; and “Pre-Approval Letters & Written Statements.”
