Pre-Qualification Letter Red Flags
What 'Red Flags' Should I Look For?
I was recently asked by a listing agent, "what 'red flags' should I look for in a pre-qualification letter for my listings?" My answer was simple, "who signs the letter is a lot more significant than what's in the letter."
Obviously, there are key factors in the letter that are relevant for your listing (like whether the buyer is pre-qualified for the purchase price being offered). However, the key point is that most loan officers can generate a pre-qualification letter with a few stokes of the keyboard. If it's that easy to generate a pre-qualification letter without actually doing the necessary due diligence and planning how does a listing agent know if the buyers are truly pre-qualified? The answer is located on the signature line.
In many cases, WHO provides the pre-qualification letter is even more important that WHAT program or HOW much down payment the buyer has. A lender with a track record of properly vetting buyers and determining a strategy for success has a much higher likelihood of getting your deal to the finish line.