The Pre-Qualification Letter Fake Out

June 12th, 2014

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I had a client I was working with recently who had a realtor I didn’t know. This realtor wanted to write a pre-qualification letter for an offer they wanted to make on a house, to take a shot at getting the realtor commission, and wanted me to write up a pre-qualification letter for a mortgage amount I did not think the buyer could qualify for. The realtor just wanted to get the property under contract and tie it up to see if we could work it out somehow after the fact. Think this is a rare event? I bet it happens way more than we know.

Do Lenders Even Know How To Pre-Approve Buyers?

The realtor’s exact words were, “If we are going to have a 21 day financing contingency, does it really matter if the letter is valid?” Yes, it does. First, if I want to keep my reputation intact, yes it does matter. Second, to be fair to the seller, yes it does matter. Third, to meet any level of professional integrity, yes it does matter. I could go on.

Words that cause me to cringe are, “It’s just a pre-qualification letter, can’t we get one in a few minutes, what’s the big deal?” It is bad enough when a buyer has a casual attitude about getting pre-qualified, but when the realtor supports this, the mortgage transaction just becomes problematic and a nightmare for all.

Get Pre-Approved As Early As Possible!

As the buyers’ agent, realtors want me to write a nonsense pre-qualification letter to try and piece a deal together. But when they are the listing agent representing the seller, the very same realtor will scream bloody murder when the financing falls through. This very same realtor would call me screaming at the top of his/her lungs, professionally castigating me for issuing a pre-qualification letter that turned out to not be accurate.

Why Even Get Pre-Approved? I Know What I Can Afford!

Realtors and sellers need to be aware that sometimes the pre-qualification letter that they have was issued under duress. They really need to ask the lender some hard questions, and not just glance through the pre-qualification letter and assume it is accurate.


Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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