Hightime, Other/Just Looking in New London, MN

Why do realtors want me to be pre-qualified before they show me houses? I don't want to go to a lender until I know what I want.

Asked by Hightime, New London, MN Wed Feb 9, 2011

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Hi, great question that prob has many answers depending on what Realtor brings you out. I like my buyers to be pre-qualified because then we can look at homes that fit not only their needs but their price range. The worst thing to have happen is find your dream home, then find out you just can not afford it.

When it comes time to write an offer on a house you will need a pre-qualification letter to accompany your offer. Lot's of agents these days will not look at an offer unless it has a pre-qual letter with it or some type of proof of funds. It is not required but it shows that you are serious and are in a position to actually buy the home. It is nothing personal, it all just helps keep people honest. Good luck in your home search, I hope you find a place you love!
3 votes Thank Flag Link Wed Feb 9, 2011
Hi there!

I didn't read the previous 19 comments so if I am repeating...sorry. Here's the fact of the matter. Realtors have gotten tired of wasting beautiful Saturday afternoons and $75 in gas driving around folks who couldn't finance lunch. Believe it or not their are many inconsiderate people who will use a Realtor to go get ideas for decorating their current home. I myself don't have time to entertain such activities. I am a professional and my time is worth something. If a buyer is "serious" the 9 times out of 10 they have no problem getting pre-qualified.
It doesn't matter "what you want" you still need to be qualified to get it.

Other reasons include,

Knowing what homes to look at. If we spend all day looking at $350K homes because you just loves those...
and you are only qualified to purchase $250K homes. We just wasted a bunch of time.

Lots of sellers won't even accept an offer if the buyer is not pre-qualified.

I enjoy spending time with my family on Saturdays...

Hope this helps!!


Jonas Mancuso
Remax Int'l
http://www.talktohouston.com
Houston family forum
6 votes Thank Flag Link Thu Feb 10, 2011
Hightime

Think of getting a loan pre-approval as checking your gas gauge before heading out on a long drive - usually a quick and easy process. And with the current lending environment, it can also be eyeopening.

In the event you stumble upon the perfect property, not being pre-approved might cause you to lose out to a better prepared buyer.

Oggi Kashi
Paragon Real Estate Group
Web Reference: http://www.oggikashi.com/
5 votes Thank Flag Link Wed Feb 9, 2011
Say you go out tomorrow and you find a home you HAVE to own. But you have to move fast as this is such an incredible deal that you need to write an offer THAT NIGHT. (Yes, despite the market it still happens).

Your agent won't be able to write an offer without a pre-approval letter from your lender. You won't have a pre-approval letter unless you get pre-qualified. If your agent presents an offer without a pre-approval letter - and there is an identical offer WITH a pre-approval letter - your offer gets tossed into the trash.

And as other agents have pointed out, if you're looking at homes with no clue as to what you can afford, your agent isn't out showing you potential homes, they are running an expensive cab service.
4 votes Thank Flag Link Wed Feb 9, 2011
My wife is a real estate agent and has in the past been called out at the last moment when we are about to go somewhere for the day and she has cancelled our prior engagement to go show a house to a potential new client. Something in this economy I do not mind, however it's the time wasters who have no intention of buying or who do not have the financial means to be looking, I do mind about!

In fact it happened last weekend she was called up sunday afternoon at about 1pm to go show somebody a house at 3pm She arranged with the selling agent for the time and then had to travel 45 mins one way to meet the potential new client at the house they wanted to view. On opening the property up and walking around for almost an hour letting the client walk around, my wife asked a few questions regarding whether the property was what they wanted. The client then disclosed that they had a bankruptcy within the last 2 years! My wife was very professional and gave the client details of a few lenders in the area who could go over their finances and to try and get them pre-qualified for a loan. Although it is highly unlikely this client will be pre-qualified anytime soon! My wife wasted the afternoon and valuable gas money because she is not on a salary and like most real estate brokers work on commission basis only so they have to sell or buy for a client before they make any money!

There have been plenty of occasions like said above where people do not realize it is a business and not a free service for their entertainment! It costs Real Estate Agents money to travel to and from properties as well as the inconvenience on what I would call out of hours! My wife's real estate company she works for frown on their agents asking if somebody if pre-qualified before they show them any properties because they believe it rubs clients up the wrong way? It's all fair and well that they can afford to utilize their precious time and money on time wasters...but my wife can't, we have bills to pay like any normal working class family!
2 votes Thank Flag Link Tue Sep 13, 2011
Before I was a real estate agent, I was a first time home buyer and new to the market. I was one of those people who found a house, got an accepted offer and THEN went to the bank. Yikes! It was a mad scramble to gather information and then a nerve wracking wait for the bank's answer. Ultimately we were successful, but I know now that it would have been much, much easier to do the work ahead of time.

By connecting with lenders early in the process, you'll be able to shop around for the best deal (and fit for you), learn about your true price range/buying power, and repair any credit problems that you may or may not be aware of. You may even learn about special programs that could enhance your home buying process- like first time buyer programs, doctor loans, special renovation financing, etc. It takes a little time and energy to do your homework, but it's well worth it. Imagine how disappointed you'll be to find the home of your dreams and then learn that you're unable to move forward with the purchase.

Today's sellers want to see strong, confident buyers. These days, more often than not, sellers are requesting that pre-qual letters be submitted with offers as extra insurance that they're negotiating with a qualified home buyer. As a buyer's agent, I find that the most serious buyers are already pre-qualified or willing to take my advice and go to a lender in the early stages of the process.

Remember...KNOWLEDGE IS POWER! Do yourself and your agent a favor and get pre-qualified!

Good luck!

Agent Andrea
http://www.AndreaCKhome.com
2 votes Thank Flag Link Fri Feb 25, 2011
it took me less than an hour to get pre-qualified at my bank (citibank)... It's a very simple process and everybody will take you more seriously with this piece of paper in hand. Just do it!
2 votes Thank Flag Link Mon Feb 21, 2011
Actually, us seasoned Realtors want you to be pre-approved, not prequalified. Prequalified (usually) means a loan officer accepts your word re: your income and expenses and makes a guess as to how much house you can afford. Pre-approved means they have pulled your credit, identified possible challenges (i.e., judgments, liens, a low score) and determined that you still may be an acceptable borrower.
2 votes Thank Flag Link Mon Feb 21, 2011
Why should I get pre-qualified? Wouldn’t it be better if I find a house first and then talk to a lender?

As a buyer, it is wise to get pre-qualified before you go out looking for a home. There are many reasons, but the most important reasons are that it benefits you, your agent, and the seller.

First, the most important beneficiary, of course, is you. The mortgage prequalification step is a relatively simple one, but it is an important one. It begins the process of formally applying for a mortgage, and it gives everyone involved--especially you--a clear sense of the direction they should be headed. When the lender pulls your credit report, he will verify that there are no outstanding issues that you need to take care of before you buy. Even paying off a small debt can make a difference in your credit score and the mortgage rate you get.

Second, it benefits your agent, because by knowing what your financial parameters are, we can spend more time looking for houses that "fit" and less time pursuing dead ends. As an example, no matter how much you might want a home for $100,000, if your qualifications say $90,000, your qualifications say $90,000. When it comes to mortgages, "yes, but" doesn't carry much weight!

Third, it gives you more bargaining power. Look at it from the seller's perspective. If you had 2 offers on the table for your house, one from a fully pre-qualified buyer and the other from an "I'll get around to that soon" buyer--to which offer would you devote the most attention? Even if the pre-qualified buyer's offer was $1000 less, would you take the chance on the buyer that perhaps may not be qualified? When it comes to a seller evaluating offers, "a bird in the hand..." definitely applies.

And the final reason, it makes the process go more smoothly.
2 votes Thank Flag Link Mon Feb 21, 2011
The honest answer.

a realtor is paid comission only if you buy.

Why would we want to spend our time driving someone around looking at $750,000 homes when they only qualify for $400,000.
Or this is the tought part, buyer may not be intersted at all just wasting both of our times.

Also, if you find the home you want being prequalified already will allow you to write an offer confidently. An offer will need to have preapproval with it.

good luck

Joanna Jensen
1 vote Thank Flag Link Sat Feb 26, 2011
You want, they want, who's right?

Personally, I take the advice of the experts.

All the best,
1 vote Thank Flag Link Thu Feb 10, 2011
Hello, Hightime!
Here's an example, you go to the grocery store. You wander through for a couple of hours picking things up, putting them back, and making your ultimate selections. You go to the cash register, the cashier rings them up. But, when she asks you how you're going to pay, you say, "Hmmm, I'm not sure how I'm going to pay or even if I can pay." The cashier voids your sale and moves on to the next person.

Same with real estate, you have to know how you're going to pay BEFORE you get started. It saves you ALOT of time and trouble. You don't want to be looking at things that are WAY more than you can qualify for. Partly because if you start high and have to go lower, you'll be disappointed in the quality of the lower priced houses. The other thing is that a seller, whether it's a traditional seller or a bank, won't even look at your offer until you have mortgage pre-approval.

Assessing your level of risk in a real estate transaction is essential. Why would you put yourself at unnecessary risk by letting the perfect house get away because you didn't have your mortgage pre-approval done, so someone else snatched it up. I've seen it happen, even in this market! Good luck~
1 vote Thank Flag Link Wed Feb 9, 2011
An agent doesn't want to show you a home that is out of your price range.
1 vote Thank Flag Link Wed Feb 9, 2011
Hightime,

I recommend to my clients to get pre-approved for several reasons but the most important I will discuss. When buyers begin to look for a home, they start to dream and find many homes they like. I want them to know that what they are looking for they can actually qualify and afford. Nothing is more disappointing then finding a home, falling in love with it and then learning that you can't afford it.

Many buyers make financial assumptions but with the many changes in the lending industry, it's so important to know where you stand and if you find something you like while you are looking, you have created for yourself a better negotiation stance proving to the seller that house you are negotiating for you can actually purchase.

There are other options for you to see houses if you are not ready to talk finances but want to see what is out there. Visit open houses. Most sites like Truila have Open Houses listed. Check those out first. Also, if there are new homes in your area, visit the model homes so you can get an idea for what is out there.

Good luck
1 vote Thank Flag Link Wed Feb 9, 2011
Because you need a preapproval letter in order to put an offer in on a property that you are going to require a loan to purchase. It can take several days for a lender to provide you with the letter and you can loose the opportunity to purchase the home to the buyer that is Prepared with a complete offer package. It's a waste of everyone's time otherwise. It's like window shopping without your wallet. A preapproval letter not only shows the seller that you are serious, it also shows the Realtor that you are a serious buyer worth investing valuable time in.
0 votes Thank Flag Link Sat Mar 14, 2015
Realtors need to have an idea of how you're qualified for in order to show you homes in that price range.
0 votes Thank Flag Link Thu Feb 12, 2015
As with most things in life it is just better to do this in the right order. If you start by meeting with a lender and getting pre-qualified you are then ready to look at homes and know exactly what type of home you should be viewing.
If you have a good guess at the type of home you qualify for but are off by even a little it can be a very heartbreaking experience.
First you could view many homes that appeal to you with Master Bathrooms or Fireplaces and fixed up basements. If you decide to write on one of these only to find out those items are out of your price range it can be very hard to go backward and now start looking at great places -but they will not meet the standards you were used to seeing.
The next problem is you can start the process of house hunting and perhaps you fall in Love with a place that really is perfect for all your needs. The listing agent may require all offers to have a pre-qualification letter included as part of the offer. So you race to the bank and find out it could take 1-2 weeks for them to have everything they need from you to qualify you for their loan program. In the meantime that house receives a offer and will forever be the one that got away and when you start the search over now with Pre-qualification letter in hand- all the places are compared to the one that got away and it's hard to move on and find another place to love. It's for your own good that we ask you to do the house hunting in the right order. My Dad would have called it "having your ducks in a row" before you start. I hope this helps you understand why it's important to start this huge life decision fully prepared.
0 votes Thank Flag Link Sat Feb 7, 2015
I get realtor's don't want to waste their time. Same goes for a buyer. I don't want to waste my time with a realtor that shows me WHAT properties they want to dump off on me while they show their buddies the best properties. My husband and myself recently where subject to this mainly because we qualified for higher priced homes but wanted to downsize being because our children are gone. We got shown every property that bordered on the higher end of what we qualified for ... granted the properties where technically downsized. It was ridiculous and so transparent what was going on. We finally just bought a home from an individual and got exactly what we wanted with all the inspections and satisfying our mortgage lender along and didn't pay a dime in commission to anyone. It was prefect! I suggest to ANYONE looking for a home start looking at homes for sale by owner. You'll get more for buck and people who's only interest is selling their home.
0 votes Thank Flag Link Sat Feb 7, 2015
Simple, if you think you can afford a $300,000 and I show you home for that price and then we learn you can only afford $200,000 you will not like anything in your new price range after viewing higher houses.

Buying a home is a huge event and their are steps you need to take before you start looking at homes. So you are preparied what the monthly cost and the settlement cost are going to be.
0 votes Thank Flag Link Fri Jan 18, 2013
Experience has proven time and time again that buyers who have 'real' money, 'real' interests, and 'best' intentions prepare for how they are going to spend the biggest chunk of money they will ever spend! Serious buyers do not waste their time or the Agents. If a buyer is ONLY interested in "looking" at their dream home, getting to know a neighborhood, or checking out prices and decorating ideas or educating themselves on the current market, then drive around on your own time or read the real estate section of your local newspaper; this does not take anything away from the seller, the serious customers who are ready, or the time, resources and earning opportunity from the Agent who is a person that is relying on real estate sales to take care of their family and make mortgage payments on their home! You would not ask a contractor to come to your home and build a swimming pool and then tell him you had no clue how you were going to pay him or if you could even afford it!

I think you should ask yourself this: "If I were charged an hourly wage for an agent's time, resources and expert guidance, what would I do to make sure that I incur the lowest possible bill?" You would obviously do everything you could in advance that would speed up the process and save you money! In most cases, the Seller pays the commission and unfortunately this prevents the buyer from understanding or respecting why Sellers and Agents only want to deal with people who are ready, willing and able. Our sellers expect this. I work with a lot of buyers -- in fact, 80% of my business is buyer side. However, I confirm I am working with buyers with the purest intentions so that I can better serve ALL my customers and be a good steward of my time and resources. It is the right thing to do. Cindy Head, Realtor Roberts Real Estate, Ocala, Florida
0 votes Thank Flag Link Thu Jan 17, 2013
I am a national Lender, we give real true bank commitment subject to property. Why, realtors need to know that with the changing guidelines by fannie, freddie and of course FHA that their clients can get a mortgage prior to spending hours in a car looking at properties that they cannot qualify for.

Danielle Watts - Naples, FL Loan officer
0 votes Thank Flag Link Wed May 18, 2011
By the way, are you are real estate sales? I ask you because face to 59 answers, you did not have any response or additional question, yet. That is different from others.

Andy
0 votes Thank Flag Link Sun Feb 27, 2011
I like Joanna's answer.

She is honest and no decoration on her explanation. She can catch the point very well. She is not shy to talk about how an agent survives in the business.

I like the business people who do not mind to say something about themselves rather than the people who cover their real mind with some reasons which sound like ethical and professional.

Andy
0 votes Thank Flag Link Sun Feb 27, 2011
The simple answer is to make sure you can afford what you are looking at. Your first step in the buying process beofre calling to look at house sshould be to be prequailified. As a buyer you need to know if you can get a mortgage in todays workd of new banking regaulations that are hindering the ability of many to even get a loan. The second reason is you need to know how much you can afford, what sales price you should be looking in and how much you will need for down payment and closing costs.

You do not want to look at a house priced over what you can buy, fall in love, make an offer and then get crushed when you can not get a mortgage on it.......

PLEASE SEE MY BLOG WITH TIPS AND ADVICE ON GETTING AMORTGAGE IN TODAYS MARKET.

http://www.trulia.com/blog/scott_godzyk/2010/10/where_do_i_i…


Good luck
0 votes Thank Flag Link Sun Feb 27, 2011
Being pre-qualified is absolutely vital to both buyer and realtors. Having talked to the lender and knowing your limits you, as a buyer, become empowered and can put an offer on a home immediately (if you find THE one, especially if it is priced right). Seller's agent job is to perform due diligence - and not get his clients excited about the offer without proof that the buyer is capable of buying. For your realtor it is vital to know what is the upper limit for you and schedule home showings according to the price level. Leeza Morris, Denton TX realtor, e-pro, GREEN, SFR, Broker associate with Keller Williams Realty Denton TX
0 votes Thank Flag Link Sat Feb 26, 2011
Hightime,

You need to be prequalified because frankly it does not make sense to look at homes you may not be able to afford. Why do that to yourself? If you speak with a lender and understand not only the price of the homes you can afford, but all the other costs involved (and most importantly, that you are comfortable with the monthly payments on a mortgage) then you will be informed. It doesn't make sense to go shopping if you are not informed, don't you agree?

Get prequalified so that you can seriously start investigating neighborhoods and floor plans. It will make your home search not only easier, but better. Knowledge is power.

Best regards,

Rachel LaMar, J.D.
LaMar Real Estate, Inc.
0 votes Thank Flag Link Sat Feb 26, 2011
Its important to be pre qualified before seeing properties! I say because, if your not sure how much home you can buy you could be looking at homes that are outside of your price range. Also the reverse can happen. If your looking at homes in a lower price point because you think that is all you can afford and they are not what you were hoping for then you wont be discouraged! When you finally do find a home that your interested in, you can make an offer immediatly. This saves you from having to wait a few days after finding the house of your dreams and risk somebody else coming in and making an offer before you. I hope my little bit of insight helps!
Good Luck
0 votes Thank Flag Link Sat Feb 26, 2011
You dont have to know what you want to get preq'd. But what you do need to know is, "how much the bank will give you." And when you do, and you are prequalified, when you do find the house you want, the process will go much quicker.
0 votes Thank Flag Link Sat Feb 26, 2011
I say you simply need to know where you stand within your comfort level – which might be higher or lower than you budget not what you might actually qualify for. It’s not good to walk into the Mercedes dealership with a Honda budget – professionals don’t like to waste time.

Steve Morgan
Fairfax Mortgage Investments, Inc
34026 Coastal Highway
Bethany Beach De 19930
http://www.bethanybeachlender.com
0 votes Thank Flag Link Sat Feb 26, 2011
Back in the day you had verbal offers without verification of funds or ability to get a mortgage. Then again we had lending with no income verification. The world changes....

By getting a pre-qual letter you and your Realtor know how much home you can afford. This seems to make sense.

Bonnie Chernin and David Rogoff
Fillmore Real Estate Branch #19
2926 Avenue J
Brooklyn NY 11210
917-593-4068 (David’s Cell)
646-318-5031 (Bonnie’s Cell)
davidrogoff@fillmore.com
0 votes Thank Flag Link Fri Feb 25, 2011
Nothing will hurt your feelings more than finding your dream home and then realizing that you dont qualify for that partcular price range. If you get pre-qualified, you will know exactly what price range to start looking in. Also, some Realtors will not even put you in their vehicle without a pre-qualification letter. Best of luck to you and I hope you find your dream home!

Marty
0 votes Thank Flag Link Fri Feb 25, 2011
When we put in an offer in Denver we are expected to have a lender's letter. A bank will not look at an offer without one... It also is in the best interest of you the client and your realtor so that you are not chasing the wrong property. Sean J. Gilliland
0 votes Thank Flag Link Fri Feb 25, 2011
Every serious buyer wants to be taken seriously, right? Every serious buyer wants to have the best agent possible in their corner, right? And every serious buyer wants their agent to work as hard as possible for them, right?

Getting pre-qualified up front will help deliver these wants to buyers. Remember agents are independent contractors working out of their own pockets to deliver a service. They have families to feed, mortgages to pay and cars to fill up with gas. And in todays housing market the best agents that are still in business can not afford to waist time and money with a buyer that is hopefully qualified.
0 votes Thank Flag Link Fri Feb 25, 2011
Dear High Time, In life we have to following certain norms or path that sometimes we don't understand. In this case we need to find out why don't you want to get pre-qualified? Getting pre-qualified is the easiest thing to do. Most lenders can do it over the phone. It will take about 10 min of your time. The 10 min investment could save you hours of house hunting. Before you go on a trip you have to map out your course. If you go to the doctor, the doctor may ask you to go have some xrays taken before he can evaluate your situation. You may not want to have xrays taken but you know that your doctor just wants to make sure he see everything before he moves on. The same applies to house hunting. Find out what you can spend, what area you want to live in and the features you want in your new home. Once you have that mapped out or xrayed a real estate pro will be able to pin point the perfect home for you. Don't fight it, it's for your own good that realtors ask you to get pre-qualified.
0 votes Thank Flag Link Fri Feb 25, 2011
Simply said...Go to your Lender first to see what you have the ability to qualify for. We are in an environment in which if you are serious about purchasing real estate you will be prequalified. Please know that this helps you most of all!
0 votes Thank Flag Link Thu Feb 24, 2011
You have your concerns. Your agent has your agent's. Simply saying, you do not pay your agent's work until you close your case so your agent would like utilize that to test your seriousness. Of cause you would not be notified like that. You would hear a lot professional terms to let you know why. Those are real reasons but not the main reason.

If you pay your real estate agent as you pay your doctor, CPA, lawyer or gardener, you may not be bother again and your agent would be very happy to do more than your want without the pre-qua letter.

By the way, pre-qualified letter is from a bank or loan broker. Pre-approved letter is from the bank which you submit your loan application. Technically, pre-qualified is just a piece of paper and means nothing or just a littler bit more than nothing.

Andy
0 votes Thank Flag Link Thu Feb 24, 2011
So you are prepared to buy a home. Why waste your time and the Realtors time , if by chance, you are not qualified .. for some reason. While you (or whoever) might pay his or her bills on time..they may be an old defaulted student loan on your credit.

Besides, your Realtor is required to submit a pre-qual letter with your offer. If it is a Saturday or Sunday, you find the perfect house with no pre-qual letter, and other offers come in on that same property, your offer may not even be considered until Monday morning - when it might be too late and another offer is accepted.

Why put yourself in that position to be dissappointed or upset?

It is just good business sense to be prepared for the process.

Phyllis Crosby, Realtor/GRI
REMAX REALTEC GROUP
TAMPA FLORIDA

813/886-2356
phylliscrosby@tampabay.rr.com
0 votes Thank Flag Link Thu Feb 24, 2011
Wouldn't you like to know ahead of time how much you can afford? It's the same as checking your bank account before you go shopping for that new refrigerator or even a pair of shoes. This pre-qual process also helps the realtor narrow down your search and gives them a sense of security before they start spending hours searching for homes and showing homes.....
0 votes Thank Flag Link Thu Feb 24, 2011
They would be doing you a disservice if they did. What if you fall in love with a house and then you don't qualify to buy it? How responsible would that be on their part? On the flip side, working with buyers ithis is their job! Their bread and butter.They take time away from families and other clients to help you. Imagine if you were asked to do that and work for someone with not a single garantee of pay? Would you do it? Furthermore, it is to protect the sellers. Imagine you list your house and your agent brough anyone that wanted to come in (prequalified or not) into your house. there are too many weirdos out there wanting into homes to steal prescriptions, jewelry, to see what your house has so they could come back and rob you, among many other things. How responsible would an agent be if he put you, as a seller, in that vulnerable of a position? Pre qualification is the best way to weed out the people who want to look at homes for bad things and not to buy.
0 votes Thank Flag Link Thu Feb 24, 2011
Cause if you dont get prequalified before, and you go out with your realtor househunting and
fall in love with a house you really love, then go to your local banker and they tell you the bad
news you arent qualified, you will be angry and mad.
So inorder to avoid that, go to the banker first, after going over your credit scores, current jobs salary,bills, and so on they will tell you yes or no on getting prequalified.
Also if you do get prequalified, they will tell you how much you can afford.
After you are prequalified, then go out and find your dream home.
Also on the rates, if your going to stay in the home a long period of time, I suggest a 20-30yr fixed rate.
Sometimes people can afford a 15yr fixed rate,with the 15yr rate,the rates are usually cheaper.
Only get a ARMS if you are going to move within 5yrs.
Good Luck,
God Bless you
Jerry Weichelt-Realtor
Century21 Whitney
0 votes Thank Flag Link Thu Feb 24, 2011
Buying a home is NOT like buying a car or truck... Getting pre-approved with a trusted lender is your future forecast that when you take to the field and start looking at properties, you know what your budget is. You should start to look at your GFE (Good Faith Estimate) from your lender, consider your monthly payment, lender fees, then closing costs on the property you end up making offers on.
We always try to educate our buyers before they just jump in their cars and start hunting for properties. It's unfortunate that many buyers start their search with out hiring a smart and educated real estate agent first. Buyers: Exclusive Buyer Representation is a Right that should be exercised. Interview agents and choose the best one for your needs and area. You wouldn't hire 3 or 4 attorneys to represent you in case, so why would you work with 3 or 4 agents to help you find your dream home? Buyers do your research of areas, neighborhoods, and schools don't always assume your agent knows. Buying a Home is a process and going through the process methodically to make educated decisions helps your emotions. Education through the process will help avoid buyers remorse!
0 votes Thank Flag Link Thu Feb 24, 2011
Some great answers here. No one wants to get involved if you are not pre-approved. Talk with a lender FIRST to see what or if you are pre-qualified, in this market it has become increasingly more difficult to get a loan. They can sit you down; show you where you are now and what to work on. Plus, if you are pre-approved they will give you your limit, which is important to factor into looking at homes, no sense looking at a home that is out of your price range. Finally, here in Tucson, AZ submitting an offer without a LSR is just about worthless (Loan Status Report) and again, you get that once you are pre-approved.

Why not? It only takes an hour or so and in the end, it is for your own good. If you don’t know any lenders, start with your local bank as you already have a professional relationship with them.
Best of luck.
Spirit
0 votes Thank Flag Link Tue Feb 22, 2011
Re-invent the wheel on your own time. This is clearly your first home purchase but you want to do things your way. Don't bother listening to the advice of a professional who has been down this road a hundred times.
No matter what price range you are in, there is always a house that you would like better. Bigger, newer, better view/schools/lot/appliances/neighborhood/finishes/flooring/layout/commute...a drain in the 4-car heated garage, radiant floor heat in the bathroom where the jetted tub is, on and on....all at a price that is just slightly above where you can actually qualify for a mortgage and make the payment every month. But you fall in love with it anyway. Ooops. Can't buy it? Astonishing. Now, go back to the 3-bedroom, 1-bath with no garage, a gravel drive in the iffy neighborhood by the freeway. The one you can buy. How does it look now?

Save yourself the disappointment.
0 votes Thank Flag Link Tue Feb 22, 2011
http://cgi.money.cnn.com/tools/houseafford/houseafford.html

The above link is from CNN's Home Affordability tool. It's a great starting point but doesn't take everything into consideration that a full approval might. Also, you don't have to register or anything. Eventually, you will have to get pre approved for any offer you want to put in.

Your realtor doesn't want to waste their or your time. Getting pre approved lets them know you are serious and allows you to put in an offer on a property that you want to buy. It's understandable that you don't want to do that right away but explain your reasons to your realtor and this might be a good judge if you want to work with him or her.

Best of luck.
0 votes Thank Flag Link Tue Feb 22, 2011
Just make sense!!!!!!!! unless you do not know what are you looking for, if that is the case you need to research and make your homework about your needs, budget, location.

Carlos Caraballo
Realtor
VA-MD
kvgcaraballo@gmail.com
0 votes Thank Flag Link Tue Feb 22, 2011
If you don't want to go to a lender, go to a website. http://www.Mortgagematch.com is a new launch that will allow you to play with different loan scenarios and print out a pre-qualification letter. I just heard about this site yesterday and played with it a little. I believe that it will be a great resource for Realtors who have clients with your mindset so that they can actually get them pre-qualfied. I agree with you that you really do not want to solidify your loan vehicle until you find a home because the home may dictate what type of loan you seek. But this will allow you to determine how much home you can afford based on your current situation, or how much home you can afford based on what you feel comfortable paying monthly.

Hope this helps.
0 votes Thank Flag Link Tue Feb 22, 2011
Hello, Isn't knowing how much you can afford to buy important to you? Why look at a home for $600,000 if you can only qualify for $450,000 home(or reverse). Best of luck but you owe this to yourself to do!
0 votes Thank Flag Link Tue Feb 22, 2011
You have received 30 responses to a question that I wish more home buyers would research BEFORE calling a Realtor! Everyone has eloquently answered your question with integrity and experience on their side. As the price of gas continues to rise, and the ratio of clients that are turned down for a mortgage during the underwriting process (typically losing their option fee AND earnest money deposit) it is quickly becoming the standard to require home buyers to get the Pre "APPROVAL". (credit pulled and an Approval letter in hand) before looking at homes. If Fannie Mae and Freddie Mac are phased out and the government gets out of the business of backing loans, this will change the mortgage industry as we know it today. Private investors would back the loans therefore qualifying for a mortgage will require tougher standards.
A Realtor gets paid at Closing. This being said, we need to qualify our business expenses and time we spend on clients that are ready, willing and able to purchase a home. You would be surprised how many "clients" ask us to take them out and either have no plans to purchase a home or they are more than 6 months out from buying. Real estate changes as quickly as the weather. A home that is on the market today may not be available or may drop in value if the neighborhood is suddenly flooded with foreclosures. There are many, many factors and due diligence that a Realtor must take in to consideration and research before we make the appointment to show you a home. All this work is part of our business and yes, this is understood. However, with so many unknowns through out the process we must take control over the one area that will either make or break us - the ability for the client to qualify for the home.
I sincerely hope this response explains our position. We love what we do but we must also protect ourselves.

Best Regards,

Lucy A. Puniwai
REALTOR®
(214)783-6416 - Cell
(682-224-8050 - Fax

puniwai@fathomrealty.com

http://puniwai.fathomdallas.com/agents/6440-Lucy-Puniwai
0 votes Thank Flag Link Mon Feb 21, 2011
An agent that requires you get pre-qualified before you work with then is a professional and they should make you journey easier and better for you. Getting pre-qualified or better yet pre-approved is the first stop on your journey to purchase a home. Meeting with a quality loan officer lets you know what your options are. Keep in mind just because you qualify for a certain payment doesn't mean you have to go that high when you purchase. You should still try to stay with a purchase that ends up with a payment you are comfortable with. Much of the market has shifted to FHA financing as we have moved away from the crazy days of various strange and sometimes fraudulent loans. One mortgage to consider is the FHA 203(k) Streamlined Rehab Mortgage. You will want to find both a loan officer and agent that are familiar with working with this mortgage. It can open up the door to many properties that you would otherwise have to pass on do to their condition. This mortgage allows you to purchase and have the fix up work done as part of your purchase with a low 3.5% down payment. Another reason to get pre-qualified is that there may be special financing programs available locally that you could take advantage of when you purchase. Sellers in many cases won't take your offer seriously until they have a letter from a lender. Jeff Byrd Re/Max Results MN
Web Reference: http://www.eagleresults.com
0 votes Thank Flag Link Mon Feb 21, 2011
H: lots of great answers here. But, remember that getting pre-approved is for YOU! You will know for how much you can qualify and what your payment and closing costs will be. That will make your decision-making much less stressful for YOU!! After all, you're not "buying socks at Bi-Mart", you are making what could be one of the largest purchases of your life. Get as much information as you can about all costs involved! Best of luck to you..
Janeese Jackson, Principal Broker
Real Estate Resource, Portland OR
jj@janeesejackson.com
Web Reference: http://fabulousportland.com
0 votes Thank Flag Link Mon Feb 21, 2011
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