Pre-qualification and pre-approval both estimate how much a buyer might be able to borrow, but they differ in rigor. Pre-qualification is a quick, informal estimate based on self-reported information about income, assets, and debts, and it carries little weight with sellers.
Pre-approval is more thorough. The lender verifies documentation such as income, credit, and assets and issues a letter stating the loan amount the buyer is conditionally approved for. Because it reflects real underwriting review, a pre-approval makes an offer far more competitive.
Neither is a final loan commitment, which comes only after full underwriting of a specific property. But in practice, sellers strongly prefer offers backed by a pre-approval letter, and many agents advise buyers to get pre-approved before shopping.