Home Buying in 19027>Question Details

Liz Domar, Other/Just Looking in 19027

how much does a buyer's agent need to know about finances?

Asked by Liz Domar, 19027 Wed Jan 30, 2008

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If you feel uncomfortable providing info to your agent, just have them call your mortgage broker or lender so they can verify your pre-approval status and plans for financing including what you will put down.
0 votes Thank Flag Link Wed Jan 30, 2008
It depends. It is relatively customary for agents to make sure you are preapproved with a lender of your choice. This is beneficial for you and the agent both - if you find a home, you are ready to go - you know what you can afford, and what it will cost you on a montly basis, and when you write your offer, you have a lender backing you up telling the seller - yes he/she can buy your home! On the agent's end of it, he/she feels confident that you can purchase something in the event that you find something, rather than wondering if you are just dragging them around town when you really can't afford to buy anything.

Sometimes when you write an offer, listing agents (representing the seller) will ask for things like "proof of closing funds" which in other words is usually a copy of your bank statement (with blacked out account numbers and personal information of course!) showing proof of things like your down payment and/or your closing fees. Also, they may ask for a copy of your credit scores - again with blacked out information.

All of these things are to benefit you as a buyer, however I suggest you find an agent you are confident in and feel comfortable providing them with that information if were to find something you wanted to write an offer on.

Hope this helps!

Sincerely,

Tiffany Mueller
1 vote Thank Flag Link Wed Jan 30, 2008
A buyers agent represents his client, the buyer. I view the buyer agents as a quarterback directing the process and making good decisions as well as having an excellent team and choices around him. Part of that would DEFINITELY include knowledge of finances, mortgage programs and so forth and have several strong mortgage loan officers that he can refer a client to based on the client's needs and specifications of program. A bad decision could cause the client to have a much higher rate or not have the loan go through at all ! Or even worse maybe the buyer simply does not quality for a loan anywhere and the buyers agent is out there showing houses to the buyer who also believes he can get a loan. Would Tom Brady be passing to one of his excellent receivers if he did not have confidence in them ? Your buyers agent should be directing the entire process. good luck !
0 votes Thank Flag Link Thu Jan 31, 2008
Liz - As Tiffany mentioned, you need to be working with an Agent that you have a fairly high level of trust with so that you are comfortable sharing important items of information...for example, I think a Buyer's Agent needs to know (not in any specific order):

1) how you plan to finance the purchase - will it be all cash, will it be 20% down with an 80% mortgage, will it be 5% down with a 95% mortgage, etc. and what do you have to prove you can bring the necessary cash to closing
2) whether you have the funds to cover the closing costs (if not, then maybe have to negotiate for them and could effect what day in the month you want to close);
3) what purchase price you are comfortable purchasing and whether you can qualify for the necessary financing at that price (why look at homes you are not going to want to purchase and may not be able to afford);
4) whether you have and can provide the necessary funds to cover the typical earnest money requirement for the price range you are looking to purchase plus the other cash up front expenses (inspection fees, sometimes lender fees like appriasal and credit report); and
5) what the "ballpark" credit scores are and whether there have been items in the past that may reduce the mortgage options available to you as a Buyer, or affect the interest rate you may need to pay.

I also think it is helpful for the loan officer and Realtor to visit in advance of any offer being submitted especially if it will be a quick closing or if the mortgage options are limited (typically due to lower credit scores) - I think the better the communication between the triangle of the Realtor, the Loan Officer, and the Buyer, the fewer surprises will occur and the greater the likelihood of the closing occurring in a smooth manner.

I don't think items such as income, other assets, other debts, etc are items the agent needs to know assuming you have been pre-approved for the financing. Best of luck in your search.
0 votes Thank Flag Link Wed Jan 30, 2008
Liz....

A buyers agent need to have familiarity about available financing. More so they need to be able to connect you with a lender that can place you with a loand that fits your needs.
0 votes Thank Flag Link Wed Jan 30, 2008
Pam Winterba…, Real Estate Pro in San Ramon, CA
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