One thing people often wonder is, “To sell my home in Denver, should I require pre-approval letters?” The reason why so many people wonder about this is that pre-approval letters used to be considered normal. Nobody went out looking for houses to buy without having a pre-approval letter from a lender in their hands.
Are Pre-Approvals Still Considered Normal?
Pre-approval letters are still considered standard practice in real estate. Most sellers and their agents prefer them because it gives them a sense of security concerning the offer being placed. Although they are still considered a normal part of real estate offers, sellers need to be careful when accepting them.
Dangers of Pre-Approval Letters
While the idea of a pre-approval letter sounds great, it’s not always the case. Sellers wondering if they should require one to sell a home in Denver should understand that they aren’t guaranteed financing. This is why every lender who issues one of these letters states they are not responsible for any misinformation presented by the buyer.
When issuing a pre-approval letter, most lenders are simply taking the word of the buyer. In some cases, they aren’t even checking credit before approving them. They are not requesting any documentation to prove income. They believe what the buyer tells them about money in savings and what kind of income they have. What happens then is many buyers are denied financing after putting in an offer because their financials don’t match what is needed.
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