Recently I've reserved a home at a new community that has just barely begun construction. The developer wants all new buyers to go through a pre-qualification process with their internal mortgage team. Their mortgage specialist keeps pressing me for info on financial background.

  1. Why is the developer so keen on getting me pre-qualified before purchase when they don't even have physical homes to sell?

  2. Why do developers want pre-qual through their own team and not an outside lender?

Both practices are quite common for other home developers as well. I just don't know why.

1 Answer 1


Most likely it is to help them secure their construction loans to build the community. By being able to demonstrate that prospective buyers can secure the financing needed to buy their homes, the builder can show its own banks that the project is solvent enough to provide funding to.
If a high enough percentage of homes are presold to qualified buyers, it makes securing better financing terms easier for the builder.

From a sales point of view, asking prospective buyers to go through the prequalification process, it helps the builder weed out those who aren't really serious about following through and resell those homes to other buyers before they're built.

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