Time for a different lender! Never heard of a pre-approval taking weeks! And not necessary?! Verification of the information (assets, credit, etc.) is key.

Shocked because the homebuyer is clueless. 

Lesson #1 - if you want your offer accepted you will need this. In my market, a seller would not accept an offer without it, proof of funds, and the buyer being vetted with the lender.  

Beth,

It sounds like they do not understand the difference.  And, I don't think you are losing your mind.  On the higher end this is rarely done, usually the answer is talk to my private client banker...A

In our area an offer wouldn't even be reviewed without a preapproval.  A prequalification typically means that they haven't reviewed credit, confirmed assets, and employment etc...

Hi, Beth.

    To me, "Pre-qualified" means that a person gave some verbal information to a lender over the telephone, none of it has been verified.  The lender replies, "assuming everything you say is true, you can borrow X dollars and have a mortgage payment of Y dollars".

    "Pre-approval" means the Lender has run a credit report, verified their income/job/employment, seen their tax returns, etc. 

New Buyer needs educating.  

Pre-quals are not worth the paper they're written on anymore, and have been questionable long before that.  It's all about the pre-app which does take time.

I would put them in touch with my lenders for a more qualified lender.

We need to be aware, the consumer is absorbing a lot of information from all directions. They honestly what to present the impression they KNOW.

The lender, very often is the buyers bank such of WF. There is a loyalty or dependence there that is dangerous to interrupt.

To me, a pre-qualification is an application for a loan which none of the data is verified. I wold take this opportunity to have 'the talk' about the assurance of closing and the real cost to everyone when a lender drops the ball. "I've got your back, but you need to trust me. Let's get a real approval with Movement Mortgage. Then when you find the house, we can close in 5 days."

totally depends on the lender.  A pre-qual from a local bank is a golden ticket.  You aren't getting an approval letter without title work and an appraisal.

Our AZ PQ is 'general' and required addenda to a purchase offer.

It says quite a bit, that the buyer has consulted with a lender, their marital status, whether they need to sell a home first, closing costs, property type and their loan and payment amount and any documentation that's been received.

THEN, 10 days into contract, a Loan Status Update SPECIFIC to the property purchased, shows the steps that need to be taken to close the loan and which have been completed and when. 

The buyer was shocked that you asked, or the lender? 

I always ask for a pre-approval. I've never had a response like that. I get them to use one of my lenders to get a quick pre-approval and tell them they have no further obligation to work with my lender if they choose not to.

I just dropped a buyer over a lousy PQ...

Buyer has a PQ that states they checked credit, employment, etc and that he is good to go.  The PQ also showed the mtg broker is the "manager".

I mistakenly believed it.

I asked buyer to get a breakdown of his fees (aka closing costs, pre-paids etc)  His mortgage broker told him I did not need that...

In fact he said: "Just tell her it is 3%".

Wrong answer...

So I did a deep dive into the buyer's finances...his income doubled for this year...(so what, too soon to use it...)

His cash was limited...so I insisted that he re-prequalify with my trusted mtg broker.

Long story short, I got a very nice e-mail from buyer that they were going to wait to save up more money...

I am going back to not believing anyone.

Mtg brokers are a dime a dozen and just like RE agents...most are not worth using...

Eve

I would advise your buyer that the true 'wierdo' is the loan officer. Everyone gets pre-app'd which tells me this is a small bank who does 5 loans a year. 

There was one bank in ILL that forbid their lenders to fill out any states pre-qual form supposedly for liability issues. AZ has a specific form that must be filled out 100% and attached to an offer  (or a bonafide proof of funds if cash).  I simply let our buyers know it had to happen or their offer might be turned down by the seller, most likely.  The buyers talked the individual lender into filling it out. She did and the buyers were able to get their offer accepted.

Wow, must be a new guy at the bank

Is it simply a "procedural" issue or something else?  Every contact doesn't become a client.  Good luck.  Most motivated people seem to know how to "win" if they want to succeed.  

Means the buyer has gone to a provider of mortgage loans, has provided certain info to that provider who then has determined if they are qualified for a mortgage and how much

Instant pre-quals and pre-approvals usually both come with contingencies. Some pre-quals are stronger than others. I've had pre-quals from credit bureaus that were just as good as a pre-approval. Ask to call the loan officer and see how much info was actually verified. ( employment, credit, savings, checking, debt, etc)

A solid pre-approval letter is mandatory in the Southern California markets currently.  Pre-qualification letters are not worth the paper they are written on.

Today...it all may mean nothing as rules are in a constant state of change and Mayors and govenors are making decisions that overflow into many industires lending included...An agent has to be convinced of everything having to do with a Real Estate sale. If not, what is the point of an agent?

It depends on the price of the property.  Usually, the lower the price, the more stringent I need to be in order to make the offer. Interestingly, in the very high end, it's very stringent again (usually, who are you, where does the cash come from? and proof of funds). In the middle, often I satisfy myself with what the buyers tell me (and I can prove) because they haven't quite made up their mind what they will do (buy it as a second home, for example). There is no one size fits all.  That's what I love about the business here on the Monterey Peninsula. 

Refer them to a trusted local mortgage loan officer.

Things work very differently in NYC. A Pre-qual is fine as that isn't going to be the sole documentation for an offer, though of course a pre-approval is better. Also a Pre-qual with a Manhattan based banker is stronger than one from a banker outside the city since Portfolio lending dominates the market here.  Some pre-approvals here do take a couple of weeks. Every offer (unless it's all cash and a condo) is going to have REBNY Financials also included (REBNY is NYC's version of the NAR- and the REBNY Financial statement is part income statement part balance sheet- detailing a buyers net worth and income). It's a reasonable approximatation of a buyers financial situation. The REBNY Financials is not verified, as it's buyer stated, but I do make it extremely clear (especially for a co-op buyer) that it should be a reasonable approximation of your true financial situation- otherwise you could be doing weeks worth of work for no good reason- including wasting the time of your references that will be needed for the purchase application. Co-op boards will truly check all your references- and for a couple that could mean a total of 12 references you have bothered because you weren't honest about your finances. I have yet to have a buyer overstate their financial picture in the REBNY (though I have had buyers omit some assets because they were trying to not let everyone see their true net worth...but that doesn't work in a co-op). 

It's really useful for agents to have a finance or accounting background to determine whether a buyer could be a fit for a property (especially with co-op's that have strict financial requirements to purchase). I typically will still take out buyers before even receiving any qualifiers from a bank or the REBNY based off our discussions. In doing this, I do risk wasting my time with an unqualified buyer- but it's a very rare thing as I am very strong on picking up on a buyers financial qualifcations based off our conversations. Typically this actually works in my favor, as it usually starts the search with cheaper properties (that most ultimately disqualify as it doesn't meet their needs and wants), and we build the relationship as the budget goes higher and higher and higher. It's not unuusal for a buyer to ultimately spend 50% more than where the search started. By that point, I often have a client for life.

You should subtly and kindly suggest to your buyer, Beth Atalay, that an application be made to your preferred lender in order to compare programs and rates and fees. You will be looking out for the best interests of your buyer...in more ways than the buyer will know.

Time for a new lender Beth, you're being played and harassed.  If that originator had legitimate delays he would have explained them professionally and when he expected normal turn around. 

The "I'm shocked" BS says it all.

The key word in there is "bank."   Have her talk to a mortgage lender.  Banks are the worst.  Bankers hours and weak letters, not understanding why a pre-approval is crucial.

Pre-qual = NOTHING!!! Meaningless and PAL's they only take a couple days.

The bank (all banks) are inept. Pre-approval or no show.

You can';t show a house right now if you do not have one...most listing agents ask for them to get the appointment along with the COVID form.

Call Jason E. Gordon 

Jeff Dowler, CRS said it all.  A pre-qual means nothing.

Suggest to the buyer that if they want to get their offer approved that they will need an actual pre-approval, and they may need a different lender that understands this.

pre qual means they have pulled credit.  so i would not expect one.  just the fact that they have chatted with a lender is good news.  If i know the lender so much for the better.  

Buyer should change banks!

Pre-qualification is performed (hopefully) by a competent loan officer. A Pre-approval is written up by a credit decision maker. The latter is extremely difficult to come by in this environment and will take a few weeks if you can find anyplace that will even complete the process. 

Right now you're stuck playing russian roulette if you do not know the loan officer. You can always advise your client to at least speak with someone you trust not to mess it up...

Definitely refer the "buyer" to one of your preferred lenders.   It does not usually take weeks for a pre-approval.

Time to have them speak to a qualified and competent loan officer!

Call the lender and show the home in either order.  A shot never taken misses the target 100% of the time.