With home sellers nervous about the coronavirus, many are trying to limit the number of interested buyers from walking through the door for an in-person tour.
As a result, some real estate agents have suggested to their clients that they limit in-person tours to people who can show they’ve been pre-approved for a mortgage.
A pre-approval letter is a written offer from a lender that says they’ve been approved for a mortgage, and also how much they’re allowed to borrow.
“Having a pre-approval letter has long been a preferred requirement by agents when submitting an offer, but having a pre-approval letter before looking at homes given the COVID-19 environment is an absolute must,” Cara Ameer, a real estate professional with Coldwell Banker Vanguard Realty in Ponte Vedra Beach, Fla., told Money.com. “Sellers and listing agents are cautious about who is coming into their homes, and they want to ensure that only those that are truly qualified are coming through their doors.”
While some sellers are insisting on pre-approval letters only, others will also accept a pre-qualification letter instead. A pre-qualification letter is easier to get, as the lender will only ask the borrower for a verbal breakdown of their finances. With a pre-approval letter, the lender will insist on supporting documents such as pay stubs, tax returns, W-25s, bank statements and so on. For that reason, an official pre-approval letter carries a lot more weight.
If real estate agents are going to present preapproval letters prior to showings, they must then ask all their buyers to provide proof, Bryan Greene, director of fair housing policy at the National Association of Realtors, told Money.com.
“We’ve seen situations where agents don’t appear to apply that requirement consistently,” Greene said. “That could raise potential fair housing issues.”