Home Buying in Flatlands>Question Details

New Homebuyer, Home Buyer in Canarsie, Brooklyn, NY

Must the buyer's broker disclose to the seller's broker how much his clients have been pre-approved for by the bank?

Asked by New Homebuyer, Canarsie, Brooklyn, NY Mon Sep 20, 2010

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Ian A. Wolf’s answer
Not only does the Buyer Broker not need to disclose that info, in my opinion they shouldn't. The only information that needs to be dislcosed regarding a pre-approval is that the buyer is qualified for the amount needed based on the offer made to the seller. Why would you tell a seller you can pay more than what you are offering? If you do that, you certainly decrease your odds of getting the best deal. You wouldn't show your cards when you play poker, don't show more than you have to when purchasing. Hope that helps.
3 votes Thank Flag Link Wed Sep 22, 2010
The buyers representative if hired by the buyer, can only disclose information ok'd by the buyer who is the client.. I f it is something the seller is asking for information about the buyers information, the buyers broker should always consult with his client first .
1 vote Thank Flag Link Mon Sep 20, 2010
The seller should always know the amount the buyer was approved for.
0 votes Thank Flag Link Fri Jul 27, 2012
Absolutely YES, why should a seller accept any offer if they don't know what the buyer is qualified for. Not only should the agent disclose the amount, they should look at it. The pre-approval should be relatively current because guidelines change throughout the year. The pre-approval also does not guarantee a commitment by they buyers bank (another discussion) but it's a good start.
0 votes Thank Flag Link Sun Sep 26, 2010
No, you don't have to disclose this.

In this market they should be happy to have a buyer making an offer. I say ask them for the loan amount they have left on the home in exchange for the amount you've been preapproved for and see how they feel about that.
0 votes Thank Flag Link Sat Sep 25, 2010
Well, a pre-approval is just a piece of paper that states how much you qualify for based on a few questions asked by your lender. It does not gurantee the amount, but rather approximates it because you should know how much your lender may be willing to give in order for you to shop for a home.

It's important to have a pre-approval while in the process of buying a home so the sellers broker knows you are serious about buying and what price range you can afford. It's up to you to decide how much you want to offer on any home based on certain factors.

In today's market before a seller's broker has his or her client sign and get locked into a contract they want to see some sort of proof that the buyer can afford the home. Many seller's brokers demand the preapproval is present to include with the offer. Believe me if you don't do it some other buyer will come up behind you and present theirs and have a stronger offer.
Web Reference: http://www.RhondaHolt.com
0 votes Thank Flag Link Sat Sep 25, 2010
Just have the lender state that the buyer has been pre-approved for the amount of this listing
0 votes Thank Flag Link Fri Sep 24, 2010
Dear New Homebuyer:

The answer to your question is no, you don't have to, but if you really want the property you should provide them with whatever they ask for. If the seller's agent is asking your agent (buyers agent) for information, your best way to make the deal would be to provide it.

As a buyer's broker, I would not object to letting the seller's agent know if we are qualified to go higher, it makes you look stronger as a perspective buyer. However, I would usually reiterate to the selling broker that our offer is not based on what we are qualified to spend but more so on what we perceive the market value of the property to be. I would advise against making a statement such as "this is the highest we can afford to go." Such a statement may cause the seller or selling agent to question if you are getting in over your head.

If the seller asks for information that you feel is too personal or you chose not to provide, that is fine, just make sure you are willing to lose the deal because that is just what may happen. Do not fail to see the forest for the trees! Good luck!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Mon Sep 20, 2010
Hi New Homebuyer, the seller's broker has every right to know if you HAVE been pre-approved, and if the offer you made is within that pre-approval range, but if you're asking if the seller's broker has the right to know UP TO HOW MUCH you are pre-approved for, the answer is no. You can use this as leverage to negotiate a deal, as long as you've been pre-approved up to the purchase price in your offer, that's all you need to disclose. No need for everyone to know you can go up $50K more if it's not necessary to do so. Best, Caroline

Caroline Choi
Broker Associate/Realtor
0 votes Thank Flag Link Mon Sep 20, 2010
Yes, but Only if they want to purchase the property. I mostly represent sellers and when there is an offer, the first thing I want for the sellers is verification that the buyer can absolutely complete the deal.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Mon Sep 20, 2010
Hello New Homebuyer,

Absolutely Not, but if you want your offer to be considered you will want to provide a letter showing loan approval for the amount that you are offering and proof of funds sufficient to cover your down payment and closing costs.

Many sellers (especially on Bank owned homes) are also asking their potential buyers to 'cross qualify' with the sellers lender to confirm the buyers ability to get a loan.

Best of luck,
0 votes Thank Flag Link Mon Sep 20, 2010
No, Just the number reflective of the offer.
Web Reference: http://www.clovelake.com
0 votes Thank Flag Link Mon Sep 20, 2010
If you are uncomfortable providing the information to seller's agent, provide the information to your attorney, who in turn will provide it to the seller; you should however, provide your lender pre-qualification/approval letter to the agents.
0 votes Thank Flag Link Mon Sep 20, 2010
The simple answer is, "no". If they are looking at your home, then chances are good they are pre-approved at that price range.

Hope this helps and good luck :)
0 votes Thank Flag Link Mon Sep 20, 2010
Charles is right. Confidentiality is paramount in this business. If you're worried about the sellers seeing a higher number that you're approved for, when you're offering a lower number, ask your mortgage broker to write in the number that reflects your lower offer price. This way, you don't have to tip your hand and show that you can indeed go higher with a higher amount approved.


Scott Miller, Realty Associates, Boca Raton, FL
0 votes Thank Flag Link Mon Sep 20, 2010
Most sellers in our market are demanding either proof of funds or a pre-approval for at least the amount of the offer.
0 votes Thank Flag Link Mon Sep 20, 2010
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