When first contacting a seller, there are precautionary measures that must be taken. First and foremost, we need to verify your identity so that the seller has peace of mind that he is talking to not only a real person, but the correct person inquiring on their home.
The reason a prequalification letter or proof of funds is required is this is always the very first step in the home search process. Before you even know which house you want, you will want to speak to a lender to have a breakdown of what you qualify for, how much you need down, how much closing costs are, and how much of a payment you are comfortable with. Often times, you may qualify for a certain amount, but after taxes, hoa, and insurance, you may not want that monthly cost so need to start lower. Obtaining a prequalification letter will ensure you are offer ready when you do find a home you like and that you are searching in a price range you are comfortable with. When sellers are reviewing offers, they more than likely will not negotiate nor accept an offer until you have proven the financial ability to purchase. If you wait to do this until after you have found your home, another buyer may swoop in before you are able to finalize qualification with your lender.