When Purchasing a Home, Why Does the Seller Require the Buyer to Cross-Qualify with a Lender?
A seller may require a buyer to cross-qualify with a lender they know and trust for a few reasons.
Unfortunately, many times in real estate, we have seen a buyer with a pre-approval letter from their lender that wasn’t actually qualified for the home and the property fell out of escrow due to them not being able to obtain financing.
Cross-qualifying the buyer with a local, trusted lender covers the seller’s backside, especially when in a “multiple offer” situation and assuring the seller selects someone who is the most qualified for the home.
The seller should only take the home off the market for a well qualified buyer
Marketing the home is very strategic, so the moment it is no longer “active” the seller needs to be as sure the buyer is a well-qualified buyer with ability to close the transaction.
How could a buyer not be qualified if they have a pre-approval letter?
Because there is a difference between pre-approval and pre-qualified and often a lender issues a pre-approval letter after only verbally qualifying the buyer, This happens more often than you would think, which is why having the buyer cross-qualify with a trusted lender is necessary.
In fact, all buyers should be qualified with a known, local, trusted lender
Here in Santa Clarita, as a buyer, you should have your pre-approval from one of the many local, trusted lenders out her. This will help you when submitting offers on a property especially if you are up against other offers and they haven’t taken this step. Many agents in Santa Clarita work with many of the local, known lenders…so seeing an approval letter from one of them would typically be sufficient.
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