What Is The Difference Between Pre-Approved And Pre-Qualified

Pre Qualified vs Pre Approved Mortgage LoanToo often, we work with people who want to buy a home in Tallahassee who do not understand the importance of being a strong buyer. They believe that due to the nature of the market, they have thousands of homes from which to choose so they can just go out and "shop."

But that is not the case in the Tallahassee real estate market. As a matter of fact, that has never been the case in just about any real estate market. You see, the inventory of homes for sale in Tallahassee is quite large, but it can be divided into three basic groups:

Graph of Tallahassee home sellers

Homes for Sale In Tallahassee - Ready Sellers

  • Ready to move now
  • Priced below the competition
  • Experienced real estate professionals handling their sale

Homes for Sale in Tallahassee - Serious Sellers

  • Want to move now
  • Priced with the competition
  • Experienced real estate professionals handling their sale

Homes for Sale in Tallahassee - Sellers Testing The Market

  • Would move now under certain conditions
  • Priced above the competition
  • Inexperienced real estate professionals handling their sale

As you can see, with each changing group, motivation drops and price increases. So, what does this mean for people who are serious about buying a home in Tallahassee? The group of homes that you are wanting to buy is small. It is almost a Sellers' market in that group. These Sellers who have priced their homes below market are getting competitive bids by other serious buyers. If you want to be a serious buyer and win a bid, below market, you need to make yourself stand-out among all other buyers bidding on a great home for sale in Tallahassee.

  • Get pre-approved with a great mortgage lender. This will be a full loan application with a conditional approval letter (minimal conditions, such as appraisal and home conditions; NOT conditional on aspects relating to the buyers' credit)
  • DO NOT get pre-qualified, which is anything less than the above (full loan application and limited conditional approval).
  • Make sure your REALTOR agrees with your choice of mortgage lender. If you are working with a real estate professional with plenty of experience, their insight will save you a lot of money and a lot of aggravation in selecting all the professionals needed in the home-buying process.

Arbor HillTallahasseeUse a "TBD" loan to give home sellers what they want. Cash! And a fast closing date.

Get fully underwritten approval before you go to contract. This means that your loan is only conditional on your inspection and appraisal. Let us show you how!

So, why do these points matter? Well, when we submit your offer to the Seller, that Pre-Approval Letter represents a bag of cash in hand for the Seller. Imagine if the Seller gets three offers, one from an pre-approved buyer, one from a "pre-qualified" buyer, and one from a not-yet-qualified buyer. If you are a ready seller, you do not want to take your home off the market without somebody first showing you the money. Be that somebody and you will get a great buy in the Tallahassee housing market.


#1 By Steve at 7/11/2017 3:48 AM

I think you're missing a entire group in your sellers list. They're the sellers that:

- Want to move now
- Priced above the competition
- Are basing their price based on their outstanding mortgage on their home

Some of these use experienced realtors -- although, I imagine more and more experienced realtors are turning these "sellers" away so they can concentrate on more serious sellers.

These are the folks that are naïve enough to price their homes based on what they paid for their house, what they spent on improvements, or what their neighbors got for their home in 2006. These are folks that simply cannot afford to lower their price because they would have to come to the closing table with a bunch of cash – cash they don’t have.

Unfortunately, I have seen more and more sellers that are facing that predicament. The good news is more and more lenders are willing to agree to short sales. That should eliminate at least some of those “sellers” facing this problem.

On a different note….


Are you going to write an entry on the housing bill that passed today? I am curious to see how you think the bill will affect the local market. The $7,500 tax credit should nudge a few fence-sitters at least.

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