"There is a big difference between the top 20% agents, and the bottom 80% agents... The top 20% will always advise you in a way that is in your best interest, and not necessarily just to get you in a car looking at properties.
I have no doubt that you are qualified, however, best case scenario, what happens if you find your dream home, make an offer, get it accepted, and get into escrow? Then you are running around stressed out because you have to gather bank statements, tax returns, you didn't realize that the IRS takes a bit to validate, you didn't plan for the transfer of down payment funds, maybe there is ID theft on your credit and your fico is not what you thought..."
Forget about ability to buy. LOGISTICALLY speaking, it is best to have all of your ducks in a row, so that when your buyers DO make offers, all we as lenders have to do is update a pay stub, and ask for the opening escrow package. All of the other approvals and due diligence is done ahead of time.
All good agents that I work with know this, and the agents that don't will ultimately find out the hard way...
If you make the distinction between good agents and bad agents, and then tell them why you are one of the good ones, by advising them to do something that is in their best interest, they will respect you more, and see you differently than the 10 other agents that say "sure, lets go out this Saturday... I know its my kids birthday, but he will get over it..."
Also, if your client is going to leave you because you wanted him/her to jump through hoops that are in their best interest, they are not your client anyways. And, you don't want them, because they refer the same type of clients...
Another way I sometimes go about it is to ask what type of financing they're using. With so many FHA and VA loans being used these days, explain that not all properties qualify, and you need to be sure the property they're interested in does, and it's especially important to the seller and listing agent to know if they're going to take a home off of the market for a buyer. If they've got no clue, then, ask the usual questions, like how much they have for a down payment, to determine loan type. If they're vague, then refer them to a lender first. If they seem to have a handle on their finances, but haven't talked to a lender, and the property looks like it'll work, meeting them once can go a long way to establish rapport with a new client.
If a buyer is at the point of looking at homes, they should be at the point of writing offers. In fact, I use the phrase "seeing homes and writing offers" a lot when I first start talking with people, so they understand that it's one and the same. I pepper my conversations with what's required to write an offer as I talk with them and explain things during the initial search phase, so I'm sort of prepping them for it as they're looking online and asking questions. Then, when they're ready to look, they're ready to talk to lenders. It won't be a big surprise.
The way I look at it is, why would anyone expect me to take time out of my day to show properties, when they won't even take time out of ONE their days to talk to even one lender when it's THEIR purchase? A serious buyer will be ready to write an offer. If they're not ready, they're not ready to make visits.
It just depends on the caller.
Mom & Dad
Brother or Sister
Friends of Family Members
any others, use your best judgement ....
How many? few ... if its going in the right direction, few ... then, before you go much more, or if they start showing signs of excitement in a property, get them approved immediately!
-- Rod --
The Powers Real Estate Team
Century 21 Award
A) Sometimes YOU dont know that you qualify. If a doctor makes 200K per year, he is qualified right? But what if he has a side business showing a loss? What if he has unreimbursed employee expenses? There are MANY things a CPA can do that can limit your qualification.
B) If you dont get qualified before hand, what happens if you find your dream home and want to make an offer? You have to run around like a chicken with its head cut off looking for documents, etc. Getting EVERYTHING you can done before the process even begins will make a very smooth loan process should you get into escrow.
C) Most of the "my loan process was a nightmare" stories start with improper planning. How do you expect someone to plan for you without the necessary time/information to do so?
There are many benefits to getting pre-approved before the process. GOOD agents know this, and do not show property without a pre-approval. If your agent is driving you around without this is not advising you the way that they should.
My first broker taught me in 2003 to never put a buyer in my car unless they were pre-approved. For those of us whgo do not get paid by the hour, this does make some sense.
That said, I've evolved over the years on that position. My policy is that I will take any buyer out at least once. This provides us with an opportunity to meet, a chance to discuss your needs and game plan. From there, the buyer and i will mutually assess whether it's time to speak with a lender.
I would have missed out on meeting some great people over the years had I not opened up my policy. That said, I do have xome exceptions.
I've had new buyers tell me they were in escrows that canceled because of ... something that could have been avoided with a proper pre-approval, or something an agent could have easily researched. There's no excuse for a buyer to lose money because of something we should have done.
Last year I had a "client". I showed him at least seven homes before I had his pre approval in my hands. He claimed to be pre approved and told me the price range he could purchase in.
Each time I asked him for documentation to confirm his pre approval, he kept saying he was going to email it to me.
Well, once I received his pre approval I learned he was not approved for the price range he had me showing him. Not even close! He ended up not buying anything, just wasting a lot of my time, gas
and money(on lunches).
Kawain Payne, Realtor
Even some of the exceptions can get silly after awhile.
And get them pre-approved plus signed onto a buyer-broker agreement.
Showing homes is a commitment of my time. I love to do it, but not as a hobby or sport. A buyer needs to show up to the table with their own level of commitment as well.
I rarely if ever show a property to a client if they haven't been prequalified. Getting a loan pre qual takes less than 1 day, and if a buyer is serious then I take time to explain to them the importance of being pre qualified these days.
It makes looking for the house that much more fun for both me and my client.
So, any number higher than zero is wrong in my book.
NMLS # 6395
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. This answer is my personal opinion, has not been reviewed or approved by the company I work for. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.
I always meet my clients at the office first so that I can get to know them and understand their needs, I fill out a buyer questionaire and discuss and obtain financing/Pre-Qualification.
A good Pre-qual is necessary in order to make an offer on a property, so we need that before we go out looking together. I also use an exclusive buyer/broker agreement with my buyers.
In my opinion we owe a responsibility to the sellers and the listing agents, to bring only qualified buyers into their homes.
We also owe a professional responsibility not to waste the buyer's time looking at homes they also cannot afford