How Do You Know If You Qualify to Buy that Home?
Occasionally if we speak to a potential buyer on the phone or a visitor to a web receives a generic email explaining pre-qualification - a buyer can go postal, and mention that it is insulting that we question their credit worthiness. My thoughts? Excuse me! Have you been listening to the news? Don’t take it personal, but a lot has changed in the last two years on financing. How do you know you qualify to buy that home?
First of all I’m not psychic. I do not know the buyers personal finances, their credit score, if they are n a lease unlti Jone 2012, if they own other properties they have to sell first, or if they have just declared bankruptcy after walking away from a home last year. Secondly, I will not meet an unqualified buyer at a vacant home. It is pure danger in the current market we are in especially when we are meeting them at mostly vacant homes. I am not a fan of meeting serial killers at homes 5 miles off a beaten path. Buyers must be met at the office for personal safety. On this rule there is no leniency. With fewer buyers qualifying to buy homes this is a major red flag. Those that are totally evasive and boisterous are hiding something. If the buyer refuses to talk to a loan officer first, and is not forthcoming there is no need to meet them. It isn’t insulting in my opinion to consider your own personal safety and to save my time for a buyer that is more appreciative of my experience and time. I am not a taxi cab driver that goes around town with my meter off, and I am not a door opener for the unappreciative and insulting. My therapist told me I don’t have to.
Lastly, it have been my experience that the louder a person yells, they are hiding something. Perhaps other agents on different occasions have demanded proof before showing, and the caller did not pass the test or more simply they have an ego problem. Either way, it is not my problem. Speak to any loan officer, and find out what you qualify to buy. Answer the personal questions…do you have enough cash, do you have a down payment, closing costs it will take to purchase the home you are looking at? I run a business, not a TV show. There is no point at looking at a 350K home, if you can only afford 150K, things are not that bad! Besides, that qualification you had 2 years ago in the Internet will probably not hold water these days.
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Most buyers will waste your and their time if you don't know if their numbers are in line with the properties you show them.
In the current market, I wouldn't take them out past the first time without some kind of pre-qual.
So one set of showings without, but after that we need to know if this is do-able.
My days of joy riding are over. If a person isn't willing to make the small committment of getting pre-qualified then they aren't going for a ride with me.
Ralph Gorgoglione (EcoBroker Certified - John Aaroe Group, Inc.) There is so little loyalty these days, I would question the first time freeebie that we normally would always allow.
Cindy Jones-Northern Virginia Real Estate & Military Relocation Services (RE/MAX Allegiance #1 RE/MAX Company in the World) Cindy great choice of words..."Joy Riding!" There is no more fun doing this...without a chance of closing a deal or mostly just wasting our time.
Most of the time our business is referrals, but some are sign calls or email contacts. Even so, I usually make it a point to have a conversation with them to talk about needs, wants, but most importantly to try and get a sense of the person. Being a small business and a woman, I have promised my husband and family that I would be careful.
I am also with Ralph - I'll give them one time for showings and after that they have to complete their homework or they do not pass the class.
I saw a new one in the MLS today that is certainly a "sign of the times". The Remarks section of the MLS said, "buyer's pre-approval letter must be submitted 24 hrs prior to showing time". That puts a whole twist on things, don't ya think!
I wonder if the seller got fed up with people viewing the home who weren't approved for the price.
Jim - today, clients questioned me about qualification. And they had no idea that there was no such thing as a stated income stated assets anymore. They were shocked. Getting a mortgage is tough and I don't think the average consumers really know this.
Cathy McAlister, GRI CDPE ASHLEY REAL ESTATE SACRAMENTO An agent I know used to have the same policy of a 'Freebie" the first time. She realized when watching the local evening TV news she was riding around with a serial rapist !
Elaine Reese, REALTOR® in central Ohio (Real Living HER, Worthington Ohio) In the last year in the Atlanta area in the upper end homes...this has become standard practice. Real buyers comply without raising a protest. We need to go back to our standards and act like professionals.
Christine Bohn, Gainesville, FL Residential Realtor® (RE/MAX Professionals, Inc.) As professionals, we cannot be wasting our time, and perhaps even allowing potential criminals into a homes to case the place.
I just put myself in the shoes of a buyer. Because I have been one multiple times:
1. Call the lender to see what I qualify for.
2. Get the loan app.
3. Gather what the bank needs.
4. Take a look at some properties myself.
5. If something I like, finish the loan ap.
6. THEN INVOLVE AN AGENT.
That's what I do. Why shouldn't a buyer I'm working with do it? It's quite reasonable! :)
IF someone wants the 'reconnaissance mission' which I'm fairly OK with because it benefits me to preview a 3-5 home max . . . AND THEY HAVE COMPLETED AT LEAST step 1 and 2, fine.
If they arrive in town not having completed those steps . . . they are touring without me.
Candice A Donofrio, Broker/Owner NEXT WAVE RE Invsts FM, AZ Reason is fine, but too many buyers here in Atlanta are unreasonable. When buyers are too defensive...they are hiding something. I also agreewith some basic grounds rules the same way you do..."If they arrive in town not having completed those steps . . . they are touring without me."
I agree 100% with that, Jim. If they're not realistic and reasonable they can go on with their bad selves. :)
I just wrote a pretty scathing post about an unreasonable 'suspect-not-prospect' who we told to talk to the hand for yelling at me because his dumb offer was called what it was. :)
Fully agree with you and all the answerers. In North Carolina, you MUST have a loan approval in hand no later than 5 days after an offer is made or your offer is gone along with your escrow. Five days before an offer or 4 days after an offer, you WILL have loan approval ( or cash ). Why beat around the bush when there is no escaping this fact of our lives now? And to ride them around, knowing they have not completed this app, well, my gas money only goes so far.
Hello Jim, we fully agree with you. It is almost oxymoronic these days with interest rates at historic lows, and mortgage loans so tough to get! We've been fortunate with several cash buyers or otherwise very qualified financing buyers however, the few unqualified or poorly qualified joy riders can make you feel like you are driving in the ditch! Thanks! John
Candice A Donofrio, Broker/Owner NEXT WAVE RE Invsts FM, AZ Buyers today feel empowered,and do not want to listen to advice.
Eddie Palmer (C21 Mountain Lifestyles) Many buyers still think that it does not apply to them. They think sellers and banks are so desparet they will take anything. That isn't true.
Alexander-Slocum REMAX Team - Vancouver WA Real Estate (RE/MAX equity group, inc. - Vancouver Washington) We had a few first time buyers that listened, and cash buyers like yourself. Everyone else like you mentioned is dreaming. Gasoline, time money, mileage, and safety are all in our court. For what? The privilege of opening a door for an ungrateful or evasive prospect?
You're not a psychic Jim? I'm bummed.
Jim I stopped doing that years ago - my time and life are too vakuable Karen
Of course we do that too. Why waste our time if that person is not qualified?
They are disappointed and we are not doing the right thing with our time.
If they get mad...next....
If they procrastinate, by saying they will. We wait. One couple we waited 3 months on to get qualified.
Alyce Martin in Albuquerque - THE Place To Be! (The Realty Group, LLC) Alyce, I knew you'd say that! LOL!
Karen Kruschka - Fairfax Prince William Stafford County VA Real Estate Service (Long & Foster America's #1 Privately Owned Real Estate Co.) Occassionaly we would bend the rules years ago, but in the last few years in Atlanta the buyers have changed, and have become very demanding. They were catered to by an excess of desparet agents that were tripping over themselves to get business. It ruined it for everyone.
Missy Caulk-Ann Arbor- Realtor(R)- Ann Arbor Real Estate (Keller Williams-Ann Arbor) A loan officer recently confided with me that an agent drove around with a buyer for 2 years that was not qualified. When she was ask to qualify the buyer, she told the agent, they could not buy, and not to bother putting them in their car. What a needless waste of time.
Like Ralph, I generally won't go past one time of showing homes, and work not even to do that. The idea of publishing that a pre-qual letter must be sent to the listing agent prior to showing is interesting. I also wonder why we don't require a refundable (at closing) deposit while working as buyer's agents. Is anyone doing that?
Hi Jim - it's difficult to tell these days without pulling a credit report.... There are tons of people who make it a "hobby" of looking at houses! Great point!
Janice Roosevelt,Ecobroker, ABR, e-PRO - Matt F (Matt Fetick Real Estate Team - Keller Williams Real Estate -) On the upper end homes, I think that is a great way to weed out lookers and losers. There are so many dreamers. I like the idea.
Eleanor Thorne, Cary Mortgage Loans (Meridian Residential) Thanks! We have to weed out the lookers.
Jim: No, you are not. These days our time is everything. With business off, we can't afford to be chasing every deal. I say work with the buyers who are qualified. The others need to be more prepared. Even when times get good again, and they will, it's imperative we use our time wisely. Thanks for the post!
Paul McFadden Mortgage Loan Officer Bellevue Washington Home Loans (The Legacy Group) Paul that is truley the way a real professional would do it. Thank you for sharing the message so succinctly.
Jim, I think the client is smart enough to know my reasoning...
Hope you have a great day!
Paul
Paul Henderson, Realtor ® Lacey & Dupont Washington homes (RE/MAX Professionals & Four Seasons Inc.) Good clients or potential clients that are serious buyers, listen and know exactly what your reasoning is for.
Several times a month, we will receive a call from someone that wants us to drop what we are doing, and show them a home immediately. They act like you are insulting them, but all we are doing is running a business. They go mental if you ask any of the following questions in any order:
Jim~ I like the way you think! One showing from me then it is off to the bank or you can find yourself another Realtor. If I at all possible I will get them to call a loan officer while in my office.
Great Post! I am a new agent so the first couple months I was willing to show anybody anything. LOL I quickly learned to ask for some proof they were ready to buy. I may look proerty up for them once and email the listing for them to preview but if they won't talk to a lender I don't show them anything. I quickly learned my time is valuable and I can't afford to waste it on looky loos.
Jim I like the callers who are big shots until you call them back the next day about looking at a home. They never answer the phone or call you back.
Jim GREAT post. I had a lead via email from a women coming home from the service in Sept. and she wanted to see one of my listings while she was home. We have emailed back and forth and since I have asked her if she was qualified or has a bank here in town to get qualified before we go look at homes and we still don't know what she can afford there was no sense at looking at homes. I have not heard from her since last week. ??? Did I insult her? I don't know.
Jan Marie MacMillan (Century 21 Winnersville) I always try to share the advantages of speaking with a loan officer first. Their information is confidential with them. However, some of the time we are just dealing with attitude.
Amanda Smith (Realty America GMAC) You learned quick and well! Time is a valuable commodity not to be wasted.
John Walters Slidell Real Estate Slidell Louisiana Homes (Frank Rubi Real Estate, LLC) We get a lot of those also. It is such a waste of our time.
June Tassillo Your Go to Girl & Realtor for Life! (Classic GMAC Real Estate - Franklin, NC 28734) My thoughts...credit issues, and they know it.
For buyers who would not discussing financing with me - my word is NEXT. There must be some openness, transparency about some financing issues although I may not need to know how much a year they make.
I typically try to be nice to tell them that a Seller needs a PRE-QUALIFICATION letter before accepting their offer anyways.
Loreena Yeo - Broker|Realtor(R) of www.Frisco-TX-Homes.com (214) 783-2210 (3:16 team REALTY) Loreena, that is an excellent idea you have. A real soft sell..."be nice to tell them that a Seller needs a PRE-QUALIFICATION letter before accepting their offer anyways."
I love these kind of people!
I ask them if they know what it sounded like in Japan when the bomb was dropped? They go , "no, what did it sound like"? I then hang up !
Some people need a dose of their own medicine, and I'm young enough to give it to them.
phil -We recently heard of a buyer that insisted on viewing homes and the insisted that he speak to a loan officer. The loan officer told him no way, and he still insisted he wanted to see the homes anyway.