Prequalification
A quick estimate of how much a buyer might be able to borrow, based on numbers they give the lender. It's not verified. Weaker than a preapproval.
Your Room opens on showings and offers, with everything before the listing already ticked.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.
See how it worksWhere this comes up: on the market
Part 1 of 4
Why a seller cares
A prequalification is a lender's estimate from numbers the buyer typed in, unverified. An offer resting on one is an offer resting on the buyer's own description of their finances.
Part 2 of 4
A simple example
An offer arrives with a prequalification letter generated online in ten minutes. The buyer has not yet given the lender a single document.
| What the letter shows | What is behind it |
|---|---|
| A prequalification for $320,000 | The buyer's stated income and debts, nothing checked |
| A preapproval for $320,000 | Documents and a credit pull |
| Asking the buyer to upgrade to a preapproval | Common, and a serious buyer can usually do it in a day or two |
Prequalified means the buyer talked to a lender. Preapproved means the lender looked.
Part 3 of 4
What people get wrong
That the two words mean the same thing. Lenders use them differently on purpose, and the difference is verification.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines prequalification in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.