Pre-Qualification Letter - Posted by Shenesa

Posted by Ed Garcia on August 08, 2000 at 14:40:16:


It’s a play on words. All three of the letters, Pre-Qualify, Pre-Approved, Approval letter, just mentioned are what I consider, dazzle them with BS letters, because they all 3 have contingencies, or weasel clauses to get the lender out of the loan.

I just gave one of my people from my workshop, a Commitment Letter for a take out loan, so that they could get their construction loan. Again, it had Contingencies.

Would I honor it? Of course, as long as the borrower meets the requirements as stated in the letter.

Speaking of BS, that’s exactly what your broker is giving you because they don’t want to go through the trouble of giving you the letter.

These type of letters are for Real-estate brokers. It puts them in a comfort zone when working a deal. They like them, because then they feel that they’re not wasting their time.

Ed Garcia

Pre-Qualification Letter - Posted by Shenesa

Posted by Shenesa on August 08, 2000 at 11:49:43:

Since I plan on flipping and not holding any properties, how can I go about getting a pre-qualification letter?

I know of some sellers who spcifically have asked buyers if they have been pre-qualified and to show proof of their qualification.


Re: Pre-Qualification Letter - Posted by Rob FL

Posted by Rob FL on August 08, 2000 at 15:34:20:

If the seller is a lending institution, HUD, or VA, then this is pretty standard for them to ask for a pre-qualification letter. If the seller is an individual, then they are not motivated. Motivated sellers seldom if ever bother verifying information like this.

Re: Pre-Qualification Letter - Posted by Ed Garcia

Posted by Ed Garcia on August 08, 2000 at 12:29:31:


A pre-qual letter, is very easy to come by. Find a Mortgage broker and ask them to pre-qualify you for a loan. No matter how bad your credit is, a lender can qualify you for some type of B or C loan. Once you have a Pre-approval letter, it doesn’t say if you’re an A, B, or C borrower, it just says you have been pre-approved for a loan up to a curtain amount.

You need to find a good broker to work with you. You can also put a carrot before the horse, by telling your broker that you plan to have them finance some of the buyers of your properties. As a matter of fact, I suggest to anyone selling a property to make as a condition of sale, that the proposed buyer agree to provide a loan package for your lender to be pre-approved as well as their lender. That allows you the opportunity to know if you have a qualified buyer rather than find out 30 or 45 days later that the deal falls through.

You cannot steer your borrower into taking your lender, but you can have them agree that, if, they cannot get their own financing, then they agree to take yours.

The proposed buyer should agree that if they cannot acquire financing from their broker or lender, that they agree to take yours, at the cost given by your broker. This prevents a borrower from hiding behind, a financing contingency and taking you off of the market loosing other potential sales, as well as time and money.

If your broker will not give you a Pre-approval letter because they cannot get your deal down no matter how you structure your deal, get another broker. A good broker will work with you, know what to do and how to do it.

Ed Garcia

Re: Pre-Qualification Letter - Posted by Vlad

Posted by Vlad on August 08, 2000 at 14:19:45:

I just wanted to ask.
My broker told me that pre-qualification is no longer done (since June or July 1st) because it wasn’t worth a penny anyway. Only pre-approval or full approval are now dealt with.
Is it so? (I’m just curious.)


Re: Pre-Qualification Letter - Posted by Shenesa

Posted by Shenesa on August 08, 2000 at 13:09:41:

Thanks Ed!

I know just the GUY!