A: Although there is no 100% guarantee, your best bet is to ask for a pre-approval letter. To receive a preapproval, the buyer needs to meet with the lender and fill out the loan application. The lender then checks the buyer’s full credit report, looks for any discrepancies or potential red flags, verifies his or her employment
status and income, and then, if everything looks OK, pre-approves the buyer for a specific loan amount. Serious buyers usually submit this document to the seller along with their offer, without even being asked.

Now, there is another piece of paper with a similar-sounding name, called a “pre-qualification” letter. The difference between the two? To get “pre-qualified” the buyer needs to just verbally tell the lender what his/her income and debts are. The lender then only checks a partially complete credit report. Since nothing is verified, and since there could be problems not shown on the partial credit report, the “pre-qualification” letter is pretty meaningless. Therefore, insist on getting a pre-approval letter. Sure, it’s not bulletproof, but it’s the next-best thing to being offered cash.

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