Which document is necessary for verifying a buyer's financial capacity before a meeting?

A preapproval letter from a mortgage broker is essential for verifying a buyer's financial capacity prior to a meeting. This document indicates that a financial institution has assessed the buyer’s creditworthiness and has conditionally agreed to lend them a specific amount for their purchase. It reflects the buyer's ability to secure financing, which is crucial when establishing their readiness to make a purchase.

Having a preapproval letter provides reassurance to both the buyer and the seller regarding the buyer's serious intent and financial ability to proceed with a real estate transaction. This proactive step can significantly enhance the buyer's negotiating position, demonstrating that they have already taken concrete steps toward securing financing.

While proof of income, a credit report, and details of previous purchasing experiences may contribute valuable information about the buyer's financial situation, they do not directly confirm the buyer’s loan amount or conditions as effectively as a preapproval letter does. The preapproval process explicitly involves a lender's evaluation, making it the most reliable indicator of financial capacity in this context.