How to Verify a Buyer's Preapproval Letter Before You Accept

Sellers and agents forward me preapproval letters a few times a month wanting a second read, and almost all of them look the same. The letter rarely tells you the thing you want to know, which is whether an underwriter has read the buyer's pay stubs or whether somebody typed numbers into a calculator. That part you go get yourself. It takes ten minutes.

Read the Letter, Then Call the Lender

Do both, in that order, before you sign anything. The letter takes two minutes and tells you what a lender put in writing. The call takes eight and is the one that matters.

On the letter: do the borrower names match the offer exactly, what loan program and down payment is it written for, and what purchase price was it issued at. A letter written at your list price to the dollar was reissued that morning, which is normal. Check the date and any expiration, and confirm there is a loan officer name, a company, a phone number and an NMLS identification number. A letter missing those last two is a graphic, not a document.

Then read the conditions paragraph. Language about final credit approval, a satisfactory appraisal and verification of funds is boilerplate. Language saying income has not been verified, or that the approval rests on information the applicant provided, is the lender telling you in writing that nobody has looked at a document yet. Two very different letters wearing the same suit.

What the Contract Already Makes Them Prove

More than most sellers realize. The standard resale purchase contract used across Arizona builds in a paper trail, and you are entitled to it.

In the August 2024 revision of the AAR Residential Resale Real Estate Purchase Contract, the Pre-Qualification Form is attached to and incorporated into the contract, so it is part of the deal rather than a courtesy. Section 2e then requires the buyer to deliver a Loan Status Update, with at minimum lines 1 through 40 filled in, within ten days after acceptance, and to instruct the lender to send an updated one on request.

Two more are worth knowing by heart. Section 2k says the buyer must notify you immediately of any change in loan program, financing terms or lender, and may only make that change without your written consent if it does not hurt the odds of approval, raise your costs or push closing. Section 2d says that failing to lock a rate, or not having the down payment, is not an unfulfilled loan contingency, and that line decides who keeps the earnest money.

The contingency in section 2b runs on approval without what the contract calls Prior to Document conditions, and the buyer must sign loan documents or deliver notice no later than three days before closing. Calendar those dates the day you accept. The rest of the timeline is in our step by step guide to selling a house.

Estimate What You Would Walk Away With

Prequalified, Preapproved, and Underwritten

Three different things, and only one means an underwriter has read the file.

Prequalified is a conversation. The buyer gave a loan officer their income, savings and rough credit picture and the loan officer did the math. Nothing is verified. A useful first step for a buyer, nearly worthless as a promise to you.

Preapproved usually means credit was pulled, documents were collected, and the file was run through one of the automated underwriting systems the agencies publish. That covers the large majority of letters in your inbox. An automated approval is only as good as what was typed into it, and it goes wrong most often on self employed income and on where the down payment came from.

Fully underwritten, sometimes called credit approved, means a person in underwriting read the documents and issued a conditions list with nothing left but the property. A loan officer holding one tells you immediately, because it is the reason they did the extra work. The problem: the letter almost never says which tier it is. You have to ask.

What to Ask the Loan Officer

Five questions, all in one call. Your agent should make it, but there is nothing improper about you being on the line.

Has this file been through underwriting, or is it an automated approval. Did you review bank statements and pay stubs yourself, or is this based on what the buyer told you. What program and down payment is the offer written on, and is any of that money a gift or coming from a sale. Is there anything in the file you are watching. Has the buyer talked to other lenders, because switching in week two restarts the clock and triggers that notice in 2k.

Expect limits. A loan officer cannot hand out a buyer's income, assets or credit score without permission, and one who declines on privacy grounds is doing the job right. What they can answer is process, and how they answer is information in itself. The one who picks up, knows the file cold and calls you back on day nine is the one whose deals close.

What the Loan Program Says About Your House

The program does not tell you whether the buyer is good. It tells you which parts of your house are about to be inspected by somebody other than the buyer.

Government backed loans carry minimum property requirements an appraiser signs off on, and in this climate the recurring ones are peeling exterior paint, loose handrails, exposed wiring and cooling that does not work. A dead condenser in the Phoenix summer is not a maintenance item on that file, it is a repair demand before the loan funds. Cash means no appraisal and no lender, which is simpler, but proof of funds is then the only thing standing in for an approval, so check its date and whose name is on the account.

Market context, because it changes what a failed escrow costs. The ARMLS STAT report for October 2026, published November 5, put the median sales price at $440,050, down 2.2 percent from a year earlier, average days on market at 86, and supply at 5.54 months, up about 31 percent year over year. Freddie Mac's Primary Mortgage Market Survey had the 30 year fixed at 7.18 percent as of November 5, up from 6.22 percent a year ago. Payments are tighter, so more files sit near their debt to income ceiling, and going back on market resets the days on market clock every buyer's agent looks at.

Part of What You Hire a Listing Agent For

A good listing agent calls the lender before you ever see a summary of the offer, and tells you what they learned.

So put it in your interview questions. Ask how they evaluate financing, whether they call the lender personally or email a form, how they track the ten day Loan Status Update deadline, and whether a deal has fallen out on them in the last year. That last one is the most useful in the set, and the honest answer is never zero. Not every agent is the right fit for every seller, and a large social media following and a record of closing files are two separate things. More in how to choose a listing agent, and if several offers land at once, see handling multiple offers on your house. We keep a page for every Arizona city we lend in.

Where This Gets Past Me

I can read a letter and tell you what it is worth. I cannot see inside another lender's file, and neither can your agent.

A fully underwritten approval can still die. People change jobs, buy a truck in escrow, or the appraisal lands under the price and the five day window in 2l starts running. If the buyer is selling their own home to make this work, you have inherited their transaction, which we cover in accepting a contingent offer. How earnest money gets sorted out is a contract question and sometimes a lawyer question, not mine. Anyone promising a guaranteed close is guessing. Our loan programs page covers the buy side, and Arizona Luxury Property Search is where to look if your next move is up market.

Frequently Asked Questions

Can a seller ask to see a preapproval letter or proof of funds?

Yes, and you should. The standard resale purchase contract attaches the Pre-Qualification Form to the contract itself, and section 2e requires a Loan Status Update within ten days after acceptance, with an updated one on request.

What is the difference between prequalified and preapproved?

Prequalified means a loan officer did the math on numbers the buyer gave them, with nothing verified. Preapproved normally means credit was pulled, documents were collected and the file was run through an automated underwriting system. Only a fully underwritten approval means a person in underwriting read the documents.

Can I call the buyer's lender myself?

You can, though it usually goes better when your listing agent makes the call. Expect the loan officer to decline to share the buyer's income, assets or credit score without permission. That is privacy law working as intended, not a red flag.

What happens if the buyer's loan falls apart?

It depends on why, and on whether notice was delivered on time. The contract cancels with earnest money returned when a buyer makes a diligent good faith effort, cannot get approval without Prior to Document conditions, and delivers notice no later than three days before closing. Not having the down payment is specifically not an unfulfilled loan contingency.

Does the buyer have to tell me if they switch lenders?

Yes. Section 2k requires immediate notice of any change in loan program, financing terms or lender, and that change can be made without your written consent only if it does not hurt the chance of approval, raise your costs or delay closing.