Your seller clients have received an offer, and the buyer has included a pre-approval letter. Your clients are a little confused and think a pre-qualification letter is necessary. What's true regarding pre-approval and pre-qualification?

Question

Business

Riley Ward

20 February, 12:44

Your seller clients have received an offer, and the buyer has included a pre-approval letter. Your clients are a little confused and think a pre-qualification letter is necessary. What's true regarding pre-approval and pre-qualification?

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Answers (1)

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Willow Frazier · Answer 1

A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller.

Explanation:

Pre-approval letter is basically a personalized promise that a certain company make to fulfill a certain form of transaction with the buyer.

The letter will contain specific information such as the amount of goods, the agreed upon price, delivery, along with date of due payment.

Even though this letter provide more assurance, Pre-approval letter is not a contract. It's only written promise that does not really bind the sellers with legalities. Which means that if the sellers do not fulfill the transaction, you won't be able to use this letter in court.