Pre-Qualification vs Pre-Approval


Q: We entered into a contract with someone who wanted to buy our home.  The agent representing the buyer presented us with a “pre-qualification” letter from a lender.  Today we discovered the buyer was rejected for financing.  How can this happen?

A: You allowed the term “pre-qualification” to lull you into a false sense of security.  The loan amounts referenced in pre-qualification letters are conditional on verification of income, employment, funds on deposit, credit report, and more.  A lender can issue a pre-qualification letter after just a simple 10-minute phone interview with a prospective purchaser.

 As a seller, your best vehicle for peace of mind would be a pre-approval letter accompanying the offer to purchase.  A pre-approval letter is a firm commitment to lend money and is issued only after verification of the crucial financial items mentioned above. 

If you need anything let us know, we're here to help: (808) 739-4174 |

About the Author

Brandon Lau grew up in Kailua and currently resides in Honolulu with his wife Andee and children Caylah, Elijah, and David. His eighteen years in real estate led him to become a Partner at ChaneyBrooks Choice Advisors. Over the past 10 years he has developed the team and systems that has created a high level of service and value for his clients.

What differentiates Brandon and his team is his consultative approach to real estate. He advises clients with relevant data and expert insight to help them make the best choices in real estate. Good choices in planning for long term dispositions, negotiating for the best price or knowing when not to pursue an investment are ways his consultative services will give you an advantage in the marketplace. His bottom line is providing service with the utmost integrity and expertise.