Your Pre-Approval Letter Should Match Your Offer, Not Your Max: A Ventura County Realtor’s Tip

You found a home in Ventura, Oxnard or Camarillo, and you are ready to write an offer. Your lender pre-approved you for more than you plan to offer. So which number should the seller see? I am a Ventura County Realtor and a licensed mortgage loan originator, and I write offers for buyers across the county. This is one small step that keeps your room to negotiate private.

Quick answer: Your pre-approval letter goes to the seller with your offer, so ask your lender for a letter at the price you are offering, not at your maximum. It is the same pre-approval with less information. A letter at your max shows the seller how much higher you could go. Ask for a fresh letter for each offer, before offers are due.

Who reads your pre-approval letter?

The seller and the listing agent read it. Your pre-approval letter is part of your offer package, and the listing agent reads the number on it. That is the letter’s job. The Consumer Financial Protection Bureau explains that a pre-approval letter helps you make an offer because it gives the seller confidence that you can get financing.

Why should the letter not show your max?

Because a letter at your max shows the seller your room. Here is an example, for illustration only. Say you are pre-approved up to $750,000 and you offer $700,000. If your letter says $750,000, the seller now knows you could come up.

That matters when a counteroffer comes back. The seller’s side is doing its job when it reads your letter. Your job is to share what the offer needs and nothing more.

What should you ask your lender for?

Ask your lender for a letter at the amount you are offering. It is the same pre-approval with less information. The letter is still true: you are pre-approved for at least that amount.

Ask how much notice your lender needs to write one, so the letter is ready before your offer goes out.

When should you get the letter?

Get a fresh letter for each offer, before offers are due. Three moments to plan for:

1. A new offer. Each home gets its own letter at its own price.
2. An offer deadline. If the seller sets one, ask your lender the day before, not the hour before.
3. A counteroffer. If you raise your price, ask for an updated letter at the new amount.

Why is your pre-approval a ceiling, not a target?

Because the most a lender will lend is not always what you are comfortable paying. Some lenders pre-approve you up to the ceiling, the maximum amount. That does not mean you should shop there.

I tell my clients to see what the monthly payment is at the highest pre-approval, then at a few prices under it. Shop the payment you are comfortable with, and let the letter match it. I explain how to ask for that range in what to know after you talk to a lender, and my pre-approval guide covers the documents.

Making an offer in Oxnard, Ventura or Camarillo?

I work all over Ventura County, and this tip works the same in every city. I know both sides, the offer and the loan. Start with the place you want to live:

• Ventura: browse homes for sale in Ventura
• Oxnard: browse homes for sale in Oxnard
• Camarillo: browse homes for sale in Camarillo
• Port Hueneme

The short version

Your pre-approval letter goes to the seller with your offer. Ask your lender for a letter at your offer price, not your max, and get a fresh one for each offer before offers are due. Your pre-approval is a ceiling, not a target, so shop the payment you are comfortable with.

A pre-approval is not a guaranteed loan, and every file is different. If you are making an offer in Ventura County, send me a message and work with me.

Common questions

Should my pre-approval letter show my maximum amount?

No, your pre-approval letter does not need to show your maximum when you make an offer. Ask your lender for a letter at the price you are offering. It is the same pre-approval with less information, and it keeps the seller from seeing how much higher you could go.

Does the seller see my pre-approval letter?

Yes, the seller and the listing agent see your pre-approval letter, because it is part of your offer package. The Consumer Financial Protection Bureau explains that the letter gives the seller confidence that you can get financing. That is why the number on it matters when you negotiate.

Can my lender write a pre-approval letter for my offer price?

You can ask your lender for a letter at the amount you are offering. The letter is still true, because you are pre-approved for at least that amount. Ask how much notice your lender needs, so the letter is ready before your offer goes out.

Do I need a new pre-approval letter for every offer?

Yes, it is best to get a fresh letter for each offer, written at that offer’s price. Ask for it before offers are due, and ask for an updated letter if you raise your price in a counteroffer. Each home gets its own letter at its own number.

Is a pre-approval letter a guarantee that I will get the loan?

No, a pre-approval letter is not a guaranteed loan offer, according to the Consumer Financial Protection Bureau. It says the lender is generally willing to lend to you, up to a certain amount and based on certain assumptions. Your file still goes through underwriting after your offer is accepted.

Sources

• Consumer Financial Protection Bureau (CFPB): What’s the difference between a prequalification letter and a preapproval letter?, last reviewed December 5, 2023

Program details described here reflect lender guidelines and are subject to change without notice. Guidelines vary between versions of these programs and between lenders. This is general information, not a loan commitment, an offer to lend, or a guarantee of any rate, term, or approval. Every file is different. Speak with a licensed loan officer about your specific situation.