Approval letter instead of Pre-approval or Pre-qualifying letter
Last week in a Freddie Mac seminar, I meet a group of Freddie Mac staff. they said that all REALTORS in the St. Louis Metropolitan will only work with buyer that have a 100% Lender's commitment and/or real approval letters.
I am wondering what other REALTORS would have to say about this wonderful idea that is a common real estate practice in Europe.
Timo Yannopoulos
CRS, GRI, e-PRO, AT HOME WITH DIVERSITY
Feel free to contact me
* Last updated by: Matthew Davis on 8/25/2008 @ 12:55 PM *

I like the idea, it would help to weed out buyers that aren't serious about looking for homes. In practice though my first showing with a new client I only request a pre-approval. I can see the value of requiring the full approval before investing too much time touring, it would save both the agent and the buyer from wasting their time in the wrong price range.

Brian thanks for reading my thoughts.
it is not only a good protection for us REALTORS to work with qualified buyers, it is also a protection for the consumers "Buyer Clients" as well as "Sellers Clients". Just imaging the disappointment and emotions buyers and sellers go through if at the last minute and on the closing table, they find out that they can not buy or sell. Or even worst scenario, buyer is under contract with a lender's promises of no prepaid penalties and 6% fixed interest, at the closing table buyer finds out that he will have a 10% APR with $5000 prepaid penalties. What can this buyer do? If buyer rejects to close then chances are to loose the earnest deposit, the inspection costs and the chance to get accused by the seller.

I believe it is a super idea and one that I have practiced for years! The majority of my Buyers come from my Home Buyer Seminars. My supporting Lender, who also is an Underwriter, interviews them, reviews credit and income, runs them throught the DU System and generates an Approval Letter! Now we can look for their home without the fear of disappointment. In multiple offer situations, we have the advantage.

Bob Hummer, ABR, CRS, MBA, SRES
Coldwell Banker Residential Brokerage
Bob@military-realestate.com
www.military-realestate.com
* Last updated by: Hummer BobH on 8/27/2008 @ 11:40 AM *