What Sellers Should Know About Buyer Preapprovals
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When you list your home, one of the most important parts of evaluating an offer is understanding the buyer’s financing. A preapproval is a key document that shows whether a buyer has the financial ability to complete the purchase. Here is a clear explanation of what a preapproval is, what it confirms, and why it matters for you as a seller.
What a Preapproval Is
A preapproval is a written statement from a lender confirming that a buyer has been financially reviewed and appears qualified for a specific loan amount. To issue it, the lender reviews income, assets, credit, and employment.
It is more reliable than a prequalification, which relies on unverified information from the buyer.
Why Preapprovals Matter to Sellers
It shows the buyer can perform:
A preapproval gives you reasonable confidence that the buyer has the financial capacity to complete the purchase. It lowers the risk of an offer falling apart due to financing issues.
It strengthens the offer:
When multiple offers come in, financing can be just as important as price. A buyer with a strong preapproval from a reputable lender stands out.
It gives clarity on loan type and down payment:
The preapproval often includes the loan program and estimated down payment. This helps you understand how the buyer plans to purchase the home and how the loan structure may impact timelines or appraisal expectations.
It supports a smoother escrow:
Because the lender has already reviewed documentation, preapproved buyers usually move through escrow more efficiently. There are fewer unknowns and fewer surprises.
My Process When a Buyer Submits an Offer
Before I present any offer to you, I call and speak directly with the buyer’s lender. This is a standard part of my process and it gives us important information. During that conversation, I confirm:
The buyer’s preapproval is current
The buyer’s financial documents have been reviewed
The buyer’s debt, income, and credit support the loan they are seeking
The lender’s expected timeline for underwriting, appraisal, and closing
Whether there are any concerns or conditions we should be aware of
This step protects you and gives you a clearer understanding of the buyer’s ability to close. It also allows us to compare offers based on real, verified information rather than assumptions.
What Sellers Should Look For
A recent date
A preapproval should be current. If it is more than 60 to 90 days old, it may need to be updated.
A reputable lender
Experienced or local lenders often help keep escrows on track. Their communication can make a meaningful difference.
A loan amount that matches the offer
The preapproval should show the buyer is qualified at or above the purchase price.
Consistency
The down payment, loan type, and proof of funds should match what is written in the offer.
What a Preapproval Does Not Do
A preapproval does not guarantee final loan approval. The lender will still complete a full underwriting review during escrow. Appraisal results, additional documentation, or financial changes can affect the final approval. Even so, a strong preapproval significantly increases the likelihood that the buyer will close.
Final Thoughts
A solid offer is more than a price. It is a combination of terms, timelines, and a buyer who can perform. A strong preapproval is a key part of that evaluation. If you are preparing to sell and want help understanding how to review financing, compare offers, or choose the strongest buyer, I am always here to guide you.