Purchasing and Lenders: The differences between receiving Preapproval and being Prequalified.
If you are looking to buy Industrial or Commercial Real Estate it’s important to identify how you are financing purchasing deal. While this seems obvious, often times I see buyers identify their type of financing to me but don’t prepare themselves to show proof of their ability finance a deal. This can erode a seller’s confidence in you as a buyer and reduce your chances of doing a deal.
The NY Times provides a nice breakdown on the difference between being PREQUALIFIED and recieving PREAPPROVAL when looking to recieve institutional financing on purchase of property. Understanding this key difference strengthens your negotiation position. It is highly recommended that you recieve preapproval from your lender because the lender requires you to disclose your financials for their review. While a lender’s preapproval letter does not guaranty 100% that the you will actually receive financing that matches the preapproval, but it’s enough to gain a seller’s confidence in you.
Getting Prequalified by your lender does not usually require to show the lender hard proof of your finances.. Sellers doesn’t recognize being PREQUALIFIED as proof that you are a serious buyer.
If you are currently looking for space in the 5 boroughs you can always call me for advise, call Jon Brooks, agent at 5CRE 212-366-0407, email me at email@example.com..
Disclaimer: Not all information above may be accurate. Please before you use any advise in this post or any other post in this blog, consult with a real estate professional and/or attorney.