There is some confusion that arises between prequalification and preapproval. This can be disappointing sometimes for both a home seller and a buyer. Real estate experts say it's smart to urge buyers to become preapproved by their lender and not just prequalified.

For a buyer to be pre-approved, the buyer must submit a loan application with the necessary documentation and fees. After the lender verifies and evaluates the application, it will notify the applicant of how much money he can afford to borrow. Armed with that information, the buyer can confidently go home shopping for the home.

Prequalification are simply an estimate of what a buyer can afford. A buyer who assumes that this estimate is accurate and chooses a home based on the information may, in fact, be denied a loan when he actually applies. This is a circumstance is a wastes of buyer’s time and can put a seller in a bad position if they've already turned away a qualified buyer. And, of course it wastes the real estate practitioner's time as well.

So make sure that you are pre-approved so as not to waste time and resources… and you will not be disappointed in the end.