Ever hear the term "ready, willing, and able" buyer? When a person lists their home, they have the right to expect everyone viewing their home financially qualified to purchase in their general price range. For instance, if I have a client who has been pre-qualified by a loan officer for a house price not to exceed $100,000, I am not about to show that client $200,000 homes. If the buyer is an investor who wants to bid on foreclosures, I don't have to explain to them that banks will more than likely never take fifty cents on the dollar. I will do research to find the best deals available and if this investor wants to pay pennies on the dollar, we'll look at auctions and bid. Many foreclosures are already priced well below value. In instances where foreclosures are not well priced, the investor will pass on that listing.
Investors generally call, identify themselves and their bank, and want to proceed quickly. While the average person is looking for a home with value and they have time to look at properties, they must also be pre-qualified. I do not want to know your personal business. I will never ask your loan officer if you are a millionaire traveling incognito. However, I definitely want to know that you have at the very least been pre-qualified. There is an area on listings where the listing agent can write comments that can only be viewed by other agents. If the listing is a foreclosure, I'll be instructed to not only have my client pre-qualified before viewing the property, I should call "Loan Officer X" and have that loan officer pre-qualify the buyer before making an offer. No pre-qualification, don't make an offer. When it comes to million dollar plus properties, BEFORE you can even see the property, I have to fax over your pre-qualification letter or a "source of funds" letter if paying cash. I don't want you to empathize or sympathize with the seller - just understand their non-emotional business sense. It's just business! You will not be given access to their home if you cannot produce a letter from a lender or bank regarding your financial ability to purchase. Listing price is another word for asking price so yes, you will negotiate your head off - that's business. You won't be able to get to first base without credentials. As a REALTOR, it is my business if you're qualified to purchase. Other wise, we are just wasting everyone's time and money!
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Jim, I made an offer for a client today and I told her that the other agent would probably call her lender. She was amazed they would do that. I told her if I was the listing agent I would. You want to make sure they are solid.
Marchel Peterson Spring TX Real Estate E-Pro ABR (Results Realty) Now more than ever it is needed...rules for obtaining financing changes by the day. I would prefer pre-approval, but that is not going to occur all the time.
Of course it's the smart way to do business. The buyer needs that lender letter at some point in time..it's better for everyone to have it up front. No surprises to the buyer (and no suprises to their agent, either) Plus it makes submitting an offer that will be accepted that musch quicker.
Jim, your absolutely right! Me as a Loan Officer I know that we all are depending on the accuracy of a Loan Approval. I am very careful to release my Approval Letters. I only allow the buyer to start looking until I have all documentation needed for loan to submit once I recieve the contract. I always identify if there are any "Contingencies" as well (Sell of current home). Realtors and sellers must know these things. I think that everyone is happier and feels more at ease that way.
Anonymous It is not only smart it is safe.
Frank (Texas Home Loan Specialist) Marta Ph: 713-373-0345 (Gold Quest Group, LLC - Houston Tx Loan Officer) It is a smart way to do business for all.
Jim, I always ask about mortgage qualification. For some it's a touchy subject. For me, it's about time management.
Good morning Jim,
This is the first thing I stress with buyers I'm going to represent. Get the pre-approval letter not just the pre-qualification letter. It is a time management issue for all concerned and the smart way to conduct business.
Matt Grohe Remax Des Moines CRS, GRI, ABR (Remax Real Estate Concepts) I agree, it is also a reliever of great stress and anxiety for the agent! A really good loan officer was telling me about an agent that showed someone for 2 years, and they were not qualified to buy a home. Meeting the loan officer is "FIRST THINGS FIRST!" It is just common sense!
Dorie Dillard: Canyon Creek & NW Austin Living (Coldwell Banker United) That would be my first choice, but I cannot always get that. However I do need some assurances that my efforts are not in vain.
Jim I don't know about you, but over the last month I have have received an unusual amount of "investor" leads. None of them panned out (As usual). Did Donald Trump or Carlton Sheets just hold a convention at the Congress Center again??
Jim-- I agree with you 100% on everything written about speaking or knowing the Loan Officer first and well as seeing pre-approval first too. When we going to the Doctor's office, they ask for our insurance info. before we see the DR.
Jim- So true! I personally write a a clause in all of my buyer agreements that the buyer must obtain a preapproval letter from a WI licensed lender within 3 days... I think where the preapproval comes from is also important. Thanks for another great post!
Jennifer K Giraldi, Atlanta REALTOR® Atlanta Real Estate Expert (Solid Source Realty Atlanta) I think you are right Jennifer...those seemed to be the only calls we got this last month!
Jen Olson (First Weber Group Realtors) I like that the 3 day thing!
Jim - The best way to handle resistance from the buyer is to ask them to imagine themselves in the shoes of the seller with the hours of preparation spent prior to a showing to have a house which they LIVE in picture perfect. I always ask the buyer if they would want just anybody parading through their own home after putting forth this kind of effort if they had no valid or justified reason for even being there.