Home Buying in 10027>Question Details

Lpaige, Home Buyer in 10027

When do I share a pre-approval letter with a seller without losing my ability to negotiate?

Asked by Lpaige, 10027 Sat Feb 27, 2010

I'm confused. Everyone says that having a pre-approval shows the seller that you're serious. However, if i'I'm trying to get a good price on a home, how else to I prove that I have a pre-approval without showing how much I can spend?

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8
I can't say I agree with most of the answers below except Richard. We are talking about a purchase, not a conspiracy. It doesn't make sense to tailor a specific pre-qualification in the amount of the offer or only a little above. It is not tipping your hand for a seller to know that the buyer is financially qualified. It's a good thing. They are not going to increase what they expect you to pay based upon your pre-approval. It is going to be a negotiation based upon what the buyer is willing to pay and the seller is willing to accept, and that formula should land you right about at the fair market value of the property.
There is an art to negotiation which is why I hope you have a very good agent working on your behalf. The sellers have agents and you should too.
1 vote Thank Flag Link Mon Mar 8, 2010
Any decent agent knows that just because you have the money, does not mean you are willing to spend it, stop worrying about the details and BE REAL with your offers...see my recent Blog Post on this Exact Issue,
1 vote Thank Flag Link Thu Mar 4, 2010
If you don't have an agent consider the services--if you do have an agent what is he/she suggesting--you do need the pre-approval letter in the amount of the listing price or in the amount of your offer--your agent can best advise you.
0 votes Thank Flag Link Sun Feb 28, 2010
What I usually do as a buyer's agent is after finding my client (the buyer) a home, I perform a CMA (comparative market analysis on the home) to determine according to the comps, location, overall condition of the house, etc. what our negotiating strategy and opening offer will be. Then, I have my client get a prequalification letter from their mortgage broker or lending institution for only the amount of the offer. If we need to go higher later on then we get another prequalification letter. If you had a four of a kind in your hand, you wouldn't tell everyone, right? Good luck!

Ralph Windschuh
Associate Broker
Certified Buyer Representative
Senior Real Estate Specialist
Century 21 Princeton Properties
631-467-0009
rwindschuh@c21princetonproperties.com
0 votes Thank Flag Link Sun Feb 28, 2010
Are you working with a REaltor? If you are, then you need to talk with them about your strategy.

If you are not working with a Realtor, then I would ask you, "why not?".

The amount listed in the approval letter is the same as your offering price. Sorry, this process is simply not that complicated.

Good luck
0 votes Thank Flag Link Sat Feb 27, 2010
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
A lender can change the amount on the pre-approval letter. You can either have the pre-approval letter show the list/asking price which shows you are qualified to buy at their list price even if you negotiate a lower price.

You can also have the lender's pre-approval letter for the exact amount of your offer. If the seller counters and you meet in the middle you may need to send a new letter each time you counter.

Mitchell Hall
Associate broker
The Corcoran Group
917-312-0924
mhall@corcoran.com
Web Reference: http://nycblogestate.com
0 votes Thank Flag Link Sat Feb 27, 2010
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
Have your lender give you a preapproval for the specific property with an amount slightly higher than what you are offering. I only takes a minute for the lender to generate the letter You must, however, show sufficient ability to move forward with the purchase.
0 votes Thank Flag Link Sat Feb 27, 2010
Lpaige, simple: you just don't let them see the exact amount. When I submit an offer with a pre-approval letter that has a client's "limit" i just black out the amount. That might not be protocal there but it's how I do it. Or, get a pre-approval letter that is for the specific amount of the offer.

Good luck!
0 votes Thank Flag Link Sat Feb 27, 2010
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