Do you have a mortgage preapproval letter

January 30, 2008

I get a lot of inquiries from potential buyers of Charleston South Carolina real estate and I’m glad to provide whatever information I can. Every listing that appears on the Charleston MLS when someone searches my website is not mine but I can still be of help, either to provide further information or to help a buyer with the purchase of a property.

On occasion, someone asks me to show them a property and I’m glad to do so (after all, that is my job, to show and help someone buy a home). Whether they are phoning or emailing, I always have 2 questions, are you working with another agent (because if they are and have a signed buyer agreement, then I can’t show them any property unless it’s my listing) and the all important second question, do you have a mortgage preapproval letter.

Why is mortgage preapproval so important. First of all, if you don’t have one, your offer will not be considered by most sellers in the Charleston real estate market. Of equal importance is that I want to know that you can actually buy a home if you find something you like.

I hope that most real estate buyers spend some time finding a good real estate agent to represent them. The only way that I can find out if a real estate buyer is serious and qualified to buy a house is to ask for a mortgage preapproval letter.

A lot of agents aren’t so busy right now because housing sales have slowed and they might not insist that you have a mortgage preapproval letter before jumping in their car and spending their time and money to show you a home or homes.

I’m not saying I’m better than those agents who don’t require mortgage preapproval letters, I’m just saying that if you want to get in the car with me and see properties, I’m going to ask for one.

Let me close with a little story. I met a very nice couple who were interested in purchasing in the million dollar plus range. Now you might think that I’d waive my policy of qualifying the buyer just for the chance to make a million dollar plus sale. Actually, it is more important at that price point than for a more typical range. The sellers of luxury real estate want to know that people viewing their homes are qualified buyers and not “looky lou’s” or even worse, potential thieves.

I explained what I required, but the buyers were going to be paying cash so mortgage preapproval wasn’t possible. I suggested that they provide some financial documentation and a letter from their bank indicating their ability to buy in that price range. I met them to begin the house hunt and they provided about 4 inches of financials indicating a net worth of 10+ million so we started looking at homes.

Buyer tip: get a mortgage preapproval letter. Please understand that you are under no obligation to buy a home.