Pre-Qualified or Pre-Approved? What Riverside Home Sellers Need to Know About Finding a Qualified Buyer

During the process of selling a home in Riverside, owners must deal with a variety of bids, each with the potential for vastly different features. Part of selling your property is making sure you choose the correct buyer, so let’s take a look at what Riverside house sellers should know about pre-qualified or pre-approved purchasers.

Pre-Qualified vs. Pre-Approved

The ordinary home buyer or seller doesn’t understand the difference between pre-qualifying and pre-approving.

Each mortgage lender has minimum qualifications that any borrower must meet in order to pass the initial application process. 

A borrower who has been pre-qualified has passed the first few barriers, but their request for a loan has not been thoroughly evaluated to determine whether it is acceptable to the lender. Riverside A lender then conducts a thorough examination of the borrower’s credit history and current financial status in order to determine the borrower’s ability to carry and repay the loan amount within the specified time frame.

To you, as a home seller, this means the difference between the terms pre-qualified and pre-approved are night and day. 

A buyer who comes forward and declares that they are pre-qualified for a loan has very little weight. A pre-approved buyer, on the other hand, has already cleared the lender’s hurdles and is a much safer proposition for you.

Spotting the Diligent Buyer

Now that we know the difference between pre-qualified and pre-approved, what else matters when it comes to finding the right buyer for your property? 

A pre-approval letter from their lender can be included with a buyer’s offer if they have been pre-approved. This is a wonderful approach for them to formally demonstrate that they have done everything necessary up to this point to get finance based on the transaction’s present circumstances.

Because the great majority of real estate transactions involve the financial backing of a mortgage lender, the lender gains a significant amount of control over the transaction based on the terms of any agreed-upon offer and the results of any appraisal inspections.

After all, the lender wants to earn a return on their investment in Riverside the safest possible way, and they want to be able to mitigate any losses if their borrower fails to make the needed payments.

Dissect All Offers

It should go without saying that not all offers are made equal, and you should scrutinize every detail to discover any inconsistencies before signing anything.

Inspections, contingencies, and even unusual circumstances such as escalation clauses are all part of what makes up an offer.

A high-priced offer with a laundry list of repair and inspection contingencies is likely to cost you a lot of time and money, whereas a slightly lower-priced offer with few-to-no contingencies may be the best option for you. Other offers can include a large down payment, which must be accompanied by proof of cash from their lender. It’s all about balancing all of your options, looking at the broad picture, and not making hasty conclusions.

Finally, if you find yourself confused or stuck in a swamp of indecision, take a breath and consult your agent to gain more perspective.

Help Finding Pre-Qualified and Pre-Approved Buyers

If you’re looking for a team to help you spot the difference between pre-qualified and pre-approved buyers when it comes to selling your Riverside home, contact us today at (951) 355-7115!