Should I get a preapproval letter with a lower amount to help me negotiate the best price?
Posted by Leslie Mann on Mon, Sep 19, 2011 @ 08:17 PM
One of the most common questions I hear from home buyers is how to handle the pre-approval letter: "We're preapproved to $500,000, but since our offer is less than that, should we provide a letter for a lower amount?"
It's understandable that buyers will worry that a listing agent will assume they will pay a lot more for a house if they see a pre-approval letter for more than what the buyer is offer. Here's my take on this.
First, it's very uncommon for today's home buyers to spend up to the top of what they're approved for (and rightly so!)
Second, if you provide a preapproval letter for the amount of your opening bid, the listing agent will assume you aren't well qualified--and if there's another bidder they may be perceived as a safer choice.
[photo courtesy of Rob Grambau]