Last month a buyer I was working with lost a unit at Circa 37 on Friars Road. Good price, solid layout, the kind of thing that moves fast in Mission Valley. They had a pre-approval letter. So did every other buyer who submitted an offer.
Here's what first-time buyers get wrong. They think the pre-approval letter is the finish line of their financial preparation. It isn't. It's barely the starting line.
A pre-approval letter tells the seller's agent one thing: a lender looked at your paperwork and said you can probably borrow this amount. That's it. Every serious buyer has one. Showing up with a pre-approval in 2024 is like showing up with shoes on. Nobody's impressed.
What separates you is what sits behind the letter.
I spent years as a financial planner before I got into real estate, and that background changed how I prep my buyers. The conversation I want to have before we write a single offer is about reserves. How much cash do you have after your down payment and closing costs? Can you cover an appraisal gap if one shows up? What does your debt-to-income ratio actually look like, not just on paper but in practice?
Sellers and listing agents care about certainty. They want to know your deal will close. A pre-approval letter from an online lender nobody's heard of, with no additional documentation, tells them almost nothing.
What works better: a fully underwritten pre-approval (some lenders call it a conditional approval), paired with a proof of funds for your down payment. Better still if your lender is local and the listing agent can pick up the phone and talk to an actual person. In a market like Mission Valley where you've got everything from condos in the $400s to townhomes pushing $900k, that lender relationship matters more than buyers realise.
I tell my clients to think of it this way. Your offer isn't just a number. It's a packet. The purchase price is one page. Your financing strength is the rest of the packet. The seller reads the whole thing.
That buyer who lost the unit at Circa 37? We tightened up their loan file, got a proper conditional approval, and closed on a different unit in the same complex three weeks later.
So before you start touring, ring your lender. Ask them what level of approval you actually have.