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Show Me The Money... Or No Showing

Lynn A. Crosby published a blog Real estate agents across the country can we ALL WORK IN CONCERT say NO I will not show a property unless as the buyer can show "proof of funding"

As you can figure from the title, it is a call to all of us to be unified and demand the proof of funds from the buyer before showing them the properties. And the comments came as no surprise, all in unison. And I usually do not like unisons that much,

I felt that it was a pity they were not in my home town as I could pick some business from all those very important and busy people. Because we never ever ask for any pre-approvals, pre-qualification letters and do not even raise this question unless they are obvious homeless people - (LOL).

And this is what they appreciate when dealing with us. We are ready to work with them without any preconditions and interrogations, etc. When we ask them what price range they are comfortable with, and they answer, we assume that they were not born yesterday.

Does it happen, that I have tire kickers? Yes. Do you know how often this happen to me? Maybe once or twice a year. Do you always sell to your pre-qualified buyers?

I have very difficult time understanding how I can turn to the person and demand his undivided loyalty, before he knows me. Before he/she decides to work with me. Before he sees any value in me. This is my chance to show it.

The beauty of the free enterprise is that I do not have to do it the way you do it. I will not do it with the only purpose to make it comfortable to others, who work differently, to make it uniformed. I understand that in Lynn's opinion if we all do it uniformly, we would finally teach the Buyers the right way to deal with us. We will educate them.

But I do not want to teach them this way of doing business. I would be appalled if asked myself, and no, I would not be understanding, that I would waste valuable time of a Realtor, who would not show me the property until I arrange everything. If you do not want my business, I will take it elsewhere.

Guys, what year is now, 2005? Are you out of your mind telling people that you are too busy to show them the properties? If real estate is so slow, how come you are all so busy? But then, this is a personal choice.

And that's fine. But it is not going to be that Buyers would not have where to go to get less busy or working differently agents to take them on a tour.

We are in the resort town. Sometimes, when it is raining, and there is nothing to do on the beach, the door of my office would open and some tourist would ask about real estate. Just curious. And we talk. And then I may ask him if he wants to see something that might be of interest. It is my pleasure to show them properties, even if I know that they will not buy on the spot, and even if they tell me that.

We have sold quite a number of condos or condo-hotels this way.

There are many shades of green and here, as well, there are different situations and scenarious, and, yes, I also do not want to waste my time. Maybe I just do it differently.

Posted by Jon Zolsky, your Daytona Beach, Florida connection on 06/02/2009 06:11 AM

Comments (73)

Proof of Funds Before Taking to Show Homes in the ActiveRain Channel

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Originally posted at: Jon's Blog: Show Me The Money... Or No Showing

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73 Comments on Show Me The Money... Or No Showing

JUN

Jon --- it's becoming my practice, too, to ask potential buyers if they have already spoken with a lender and if they are preapproved. If they aren't yet, I give them names of at least three lenders they can talk to, suggesting to them to shop around for the best rates, best programs, and best possible relationship with a lender.

It's easier to hit the bulls-eye when there is a target. They can achieve their goal of buying the right property if they have a goal. And knowing how much they can afford and what they are comfortable spending gives them the parameters of what to aim for.

Giving them information to guide them in the process is all part of the service.

Then I invite them to come to my office so that we can look at properties on line, determine what appeals to them.

I think perhaps asking for a pre-approval letter would be more appropriate. I think asking to see proof of funds prior to showing a property is a bit harsh.

Besides, it's the lenders job to check on the validity of the funds. You as the listing agent can't guarantee those funds are seasoned or that they will be there when you open escrow, so why make it a prerequisite to showing the property?

We have our buyers come in to the office and sit down with us so that we are all on the same page. During this time I have them speak to a lender if they haven't already.

Nothing more frustrating to all parties involved going to look at $300,000 homes and finding out they can only afford $200,000. After looking at $300k homes they will be disappointed in the $200K homes and you will have wasted your time showing them homes they can't afford.

Jon,

I have found that buyers almost universally think they can afford more than they really can. I don't demand that they do anything when we first meet but I'm generally pretty good at getting them to speak with my lender before we go out.

Rich

Hi Jon,

Thanks for your post. I generally give buyers a one-shot deal in terms of looking at homes without a pre-approval. That way I get to know them, they get to know me, and it helps both sides figure out if we even want to work together. After that one shot, though, you better believe I am all over the pre-approval thing. :)

To me, the pre-approval letter doesn't just address a buyer's qualifications, it verifies their identity.

Too many real estate agents have been hurt or killed while showing property, including one in nearby Virginia, to overlook the importance of this precaution. When strangers have a pre-approval letter from a lender I know and trust, that lender has verified their employment and other facts about them. Chances are, an axe-murderer hasn't gone through that process - but if they did, authorities would know where he works.

It's also a fair-housing thing. If I'm going to ask anyone to go through the pre-approval process, I'd better ask everyone else to do so, as well.

Jon,

As Realtors all we have is time and knowledge. Knowledge can be gained...time cannot.

Hi Jon,

We are the professionals and it is our job to explain the process and get the buyer pre-qualified right up front. There is nothing worse than a buyer looking @ homes $400,000 - $450,000 when they are only qualified for $350,000 and don't like that payment so need to look @ homes priced @ the $300,000 price point. You are doing them a favor and yourself by be honest and setting expect ions that are realistic. They will respect you and treat you as a professional if you act like one.

Jon - I generally conduct "Buyers Interview" for the first meet and ask that by the time we meet to look at properties they s/w a lender. I also provide them with at least three preferred lenders to have a dialog with based on their financial circumstances.

We have many special programs that are county and lender specific , I would rather find the right match than just have a pre-approval letter that has no value when it comes to writing an offer

The only time I request "Hard" proof funds is if it is a CASH buyer , just to protect all parties involved.

Jon,

I too will take folks out 1 time before they show me the money. That said, I do try to qualify first but will bend the rules to establish rapport. Great post!

Jon, I see your point, sometimes its a spur of the moment to go previewing, as the clients who just popped in on a rainy day. Most often I ask them have you spoken to a lender yet? That gives me an idea if they are serious buyers and what price range. Sometimes its simply they didn't know what order to begin to buy a home, then we chat and go preview some homes, but they take home a list of lenders.

I would not refuse to show homes to someone because they did not have proof of funds, but I will not jump in my car and meet them at a home from a phone call either. Come into the office, first... and that is a personal decision based on my safety.

Would you meet a prospect at a coffee shop and spend an hour going over their situation and how you might be able to help them? You'd do that all day long.

So I just meet them at a house that they want to see and do the same thing at that house that I would do at the coffee shop or my office. When you give them something of value, showing them a home they want to see, they are more willing to give you what you want.

the ever struggling system to bring our buyers to our side. . . it will never be perfect. .I know that too well

Jon, In my market about 90% of the listings are either REOs or Short Sales. Most will have multiple offers within a few hours of hitting the market. A buyer CANNOT even submit an offer without POF or a pre-qual letter. So.....if they don't have this in their hand prior to looking then they are wasting their time. This is the reality of the market in my area. If I don't make sure they are prepared then I am doing them a disservice. It has nothing to do with being "too busy" but everything to do with being a pro.

I like to sit down with buyers and explain the home buying process and tell them that if they find a home they like , they would need a pre qualification to present with the offer. I also tell them that it is a good idea to get a credit check so that there are no surprises.

Very nice post and I tell my agents I do not even open the car door unless I have an idea about the buyers ability to buy and IF THEY NEED TO SELL a home before they buy

Jon, I understand where you are coming from, and I don't consider showing properties to un-qualified prospects a waste of my time either. I feel like the tour is a sample of what I can do for them.

I will give them what I call a "teaser tour" and build rapport with them. It is a quick tour of no more than 3 homes close together (I couple it with previewing so I get a 2-for). I feel more at ease on my feet showing them properties and discussing the aspects out in the field rather than in my office. I take lots of notes and discuss the all importance of pre-approval while we tour. I think they feel more at ease this way.

I do however see the logic and need for a safety net for agents from physical harm.

In Oklahoma, you have to be preapproved to make a contract offer. If "buyers" are not willing to go to a mortgage company as part of the opening plan, I suggest a fee for service. I have to pay for a CRS class to get educated, and buyers should pay also if that is all they want.

I ALWAYS ask if a buyer has fundign in place and what we can do to make it happen if they don't...I explain that an offer is ALWAYS stroinger if the funding is at LEAST in the approval stage.....

PRE-QUALS are not worth the paper they are written on in my opinion!!

Having a pre-qualified buyer is a must. When I first became licensed I began showing a young couple some houses. They told me they were pre-qualified, so withouth actually getting the name and number of their loan officer, off we went to look at houses. After about 2 weekends of searching for houses in the $150k range, I finally asked for the name and number of the lender they were working with. I made the call only to find out they were only approved for about $110k and I had been showing the buyers homes in the $150-160k range. I learned my lesson quick. I always get the lenders info up front now before we even look at properties

Jon,

I wish you were in my market. I would be happy to give all those not willing to get a pre-qualification from a good lender. I prefer a fully underwritten approval since sub-par lenders pre-qualification are normally worthless.

I want to sell homes and showing homes that the buyer may or may not be able to buy leads to prospective buyers disappointment.

I always pre-screen my buyers before any showings. No qualification, no showings. Why waste everyones time?

Getting buyers pre-approved has always, and probably will always be, a hot topic. Everyone has to decide for themselves how to work it.

I agree that consistancy is best. Whatever you decided, use that system fairly with everyone.

When I meet with someone the first time, I ask them to get a pre-approval letter before making an ofer. If they have not done so prior to going out, I have a sit down with them.

Generally most people will be readable after you have been doing this for a while. If they seem new at the game of buying, I ask them what they are comfortable paying a month, then show them an amortization table, to figure out what they can afford. I can usually get an idea of their comfort level by their body language when we look at numbers. If they squirm, I send them to the bank. If they seem ok I get on the MLS and show them what they can get for the money.

I will only go out once without a pre-approval. Sometimes not at all without one. I have been pretty good at judging people and their level of commitment. So far it has worked well.

As for safety, I agree that it does make sense to have that letter first. That is best. I do have a safety plan and highly recommend it to all, even you big tough guys. I have a friend who is disabled and she is my safety net when I go out on almost every showing. I excuse myself before going out, call her and give her my itinerary. She knows every stop and on arrival, I can discretely speed dial her number and leave the phone on during the entire showing. She would have the police there in minutes if it sounded suspicious. I never put someone in my car unless I know them well. My friend gets their tag as well. And I always get a copy of their driver license to leave at the office, with someone.

Paranoid? Maybe, but I want to know I am coming home.

I think it is important to do what is best for you, and what works best in your area. But it is absolutley true that you can't show homes that are right for someone unless you know a pretty definate price range to work within.

No lender...no letter...no showing...no time for people who are not serious about the process...respect my time...don't waste your own Mr./Ms Buyer..no long list of features you have to have and think you are writing for half the list price...pride and professionalism dictate pre-qualification.

When a potential buyer contacts me I always recommend for them to get pre-approved and I will explain to them as well why. With the REO's and Short sales in our market when a buyer likes a home and there are not pre-approved there are loosing the deal.

I also personally do not like to show a buyer a home they might can not afford and until they are pre-approved we do not know what there true price range is. This will not only safe our office time, it will ensure that the buyer does not fall in love with a home they can not buy and keeps them grounded.

Bettina

Jon - an undying debate indeed. Good post.

To the commenters on here - do you guys ever actually try to look at it from the customer's perspective? Reading these has been a real education. No wonder the real estate market is in the dumps - after all with so many pre-conditions for SHOWINGS, what are the chances the right property will find the right buyer...

Where I am, a lot of people who end up purchasing homes are not from here. So they take a trip to see friends or relatives, and go look at homes. They may buy something totally different in a year or two or decide to build something instead even later - but the agent that did not presume they were "tire-kickers" or idiots in the first place, the one who does not begrudge them the time and consideration will most likely get their business for years to come, and that of their friends.

Any R-bearing lady or gent with pre-conditions for showing will not get my business. It's simple - a) I know what and if I can afford, or at least have enough of an idea of a range, b) I just MET YOU, i don't know you well enough to hand you my PERSONAL info, c)I no longer need a realtor to find a home that I like, so unless an agent becomes my trusted advisor and ally in this process - this here relationship ain't gonna work.

Bryant's points make sense when dealing with quickly moving deals where a few hours make a difference, but for the rest of the real estate practioners out there turning away business whether it be now or a year from now - you are not doing consumers any favours by being arrogant under the cloak of professionalism.

I feel it is our job to get purchasers prequalified before we show. Why inconvenience the sellers who have busy lives to give up what little free time they have to clean up, get ready and leave for someone who cannot afford their property?

Jon, it is our responsibility to make sure that buyers are pre-approved or have the necessary funds to purchase, otherwise we do waste everyones time. Also in this market of REO's being so prevalent we know that they will not even look at an offer without a pre-app letter!

Great post!

Hey Jon,

Good for you! But I like my way better. My time is too valuable not to know wheather I am working with a qualified buyer or not.

You know how many buyers don't sign that Buyer Broker at the first meeting? Maybe two out of a hundred.

Maybe its just my good looks. LOL

Jon,

Congrats on the feature! This is a subject that you can't help bu think about from time to time. If I had 10 clients come in the office on the same day and ask to look at property, I would love to see a pre-qualification letter to know how best to spend my time. But, the market is such that we provide a service and like you said, we don't ask them to show us a letter especially not before we can gain their trust and they want to work with us. I agree with your rreasoning of "How I can turn to the person and demand his undivided loyalty, before he knows me?".

Once thing I did learn is that since I don't want to disturb sellers with showings until I also get to know my clients and their tastes when it comes to houses, I will try and show mainly homes that are vacant especially if asked to show property on a very short notice. I love showing property and establishing relationships even though the clients may not be close to making a decision for buying any time soon. I am hoping they will remember me and want to do business with me when the time comes or got to know me better and sufficiently enough to mention me to their friends and relatives who may be more ready and closer in time to buying a home.

Gerry's AR signature

Showing without knowing the ability to fund is a rookie mistake....unfortunately some make a career of being a rookie (albeit a short career)!

So true, show me the money....Lots of people just run you around and don't know what there financial capability is. I always ask about there pre qualifications and the plan they have to get a mortgage up front. Shame on me if I don't!

Patricia Aulson/Portsmouth NH Real Estate

An agent who has no pre qualifying questions or set of guidelines is asking to have their time wasted. Being a door opener is not what I'm here to do. I always find that the agents who ask the most questions and who pre-qualify the hardest tend to do the best because they work more efficiently.

Jon, I now tell my clients to get pre-qualified so we have a valid price range while looking for homes so they will not be disappointed if the one they want is more than they can afford.

I can see in resort areas where house hunting may be more impulsive that getting a preapproval letter before showing homes might not be practical. I think for most other purchases it only makes sense.

I have had many buyers that have had blips on their credit report, or a bankruptcy 3 years ago that they didn't tell me about that impact their ability to buy.

It is a personal choice, but I like to spend time with my family which means being super efficient with my work time. I will show a few homes to a buyer without a preapp letter (based on my own mini-qualification run), but not many. I value my time too.

How many people go to a car lot just to take a look and wind up going home with a shiny new car? It is called impulse buying and we americans are very good at it.

In my market area most of the best deals are REOs and the buyer must have a prequal with their offer. I explain this to my clients and most have no problem with it.

If we fail to set expectations by laying out a plan for the buyer to purchase a home, this can lead to confusion and frustration by all parties.

Have a Profitable Day!

- Harrison Painter

I invite them to my office to look online and build a relationship. I might show them a couple of homes close by. By the time we are done I know if they are buyers or not. I've invested only a small amount of time to get to know them and educate them. This includes a referral to a lender if needed. Most buyers in this area are cash and turned off by sales people that move too fast! This works for me!

Folks would be shocked, shocked knowing my approach to working with buyers. Shocked, shocked, I tell you.

But, it works for me and we sell a lot of homes.

Of course, no offer is written without a lender's letter.

We haven't lost our mind.

Why shouldn't you ask that's the question? If you don't want too that is great and maybe you are wasting your time more than you know. Just your example of touristas sitting around in the rain looking for something to do would piss me off to no end! Let's look at homes for something to do! What? That's what Open Houses are actually for isn't it? We have nothing to do so let's wreck a realtors day with his family.

There is nothing wrong with asking for a preapproval letter and have them bring it with them. If they comply, I think they are serious people who want to purchase a home. I might not even ask them for a copy of it - but I ask them to bring it and they do. I think it weeds out the tire kickers from the real purchasers. I think that it also shows the 'professional way' we conduct business. But, silly me, I also don't go into a car dealership unless I can buy one!

What's wrong with not wasting YOUR time?

I agree with you it is very hard to qualify a person before we get them in the car. I think people would run to all the other hungry realtrs in town.

Not all pre-approval letters are created equal. It's good to know the loan officer is for real, too.

Jon-it some cases I agree..coming from the same town as yourself...especially on the beachside..BUT before I would jump in the car with any customer...I would definitely ask a series of questions...before even thinking of putting them in my car..too many times...yes they are on vacation..trying to find something to do.

If you ask the right questions often times you have an idea of what is reality and what is a pipe dream..for them...for you..and for the poor seller who believes that they actually have a ready willing buyer.

We have agents who do this and sometimes its a hit and sometimes a miss...for me I'll continue to ask the right questions...and trust my gut...and if the gut tells me to ask for a full blown approval letter that is exactly what I will do.

Hi Jon, In a perfect world all buyers would come in to our office, show us their prequal letter and...well, you know. It often seems like buyers don't have a good sense of the correct sequence in purchasing a home. To erect obstacles at that point in time is to push them to another ( more flexible ) agent !

Ditto what Inna said...

Okay, I'll add my own... I agree with you 1000%, but if you want to stir up a great debate, just advise agents not to demand a pre-qual-better-yet-a-pre-approval before you give them the honor of a little of your time.

I've looked for houses many time with agents across the country and if any of them had shown me such disrespect as to demand my financial qualifications before they take the time to impress ME (uh, the customer who creates the paychecks), I'd look elsewhere... for someone hungrier, I guess.

I've had the same experience as you - I never ask for financial information at our first meeting. Typically they bring it up when I ask them if they have a price range in mind - when they're not sure, they ask ME what they should do next. But even if they don't, I'm very rarely burned - and certainly not more so than I'm "burned" by pre-qualified buyers who simply change their minds or poof without notice.

Great post- this is bookmarked in my file!

I treat this business as a people business and try to develop a relationship with buyers. I do not care if they have not talked to a lender when I first show them a home. I explain that they need to already have done that so we can submit a pre approval letter with the offer so we can make your offer look stronger. Especially if it is a foreclosure, which is a red hot topic with buyers.

And if we have to wait a couple of days for the bank, the great deal we just found on the home you want may be gone before you get you financing arranged. Plus they may find out they are looking at homes that do not fit their budget. I explain I understand that they are busy and I do not want to waste their time showing them homes that do not fit their budget.

I am not saying devote weeks on end with them. If they cannot take the first step in talking to a lender, then they have told me without a doubt that they are wasting their time. And mine. But if you blow people off, you may be missing a great chance to sell not just one home, but several by virtue of the referrals. I try to explain the steps for buying a home in this market. And a pre approval is the first step to getting the great deals.

Hey Jon good thoughts. I used to live in a more resort type area and we did have client pop in once in awhile just wasting time.....or not. Some of them bought a year or so later......or sent folks my way, Now in Phx we're dealing with many, if not most, reo's and buyers must have their qualification in hand plus one from another one from the particular seller/lender. Just the way it is. If the proper stuff is n't submitted with the contract we're out of the game.

With my other folks.....my normal process is to have a 'first meeting' where we meet and greet and go thru all the standard questings etc. Qualifying always come out and it never seems to be a big deal. Granted....most of this cliental base are either long time clients or referrals so them come to the table with trust in hand.

I think if this works for you, keep doing it. I always ask if they are pre-approved. I have had way too many folks not being realistic about what they qualify for not to.

Jon - I'm wiith you on this. I'm happy to take folks out to see property without a pre-qual or pre-approval. It gives me a chand to develop a bond with them so they trust me when I advise them about financing, and pretty much anything else.

I'm in the trust business. If they don't trust me, they don't work with me. It's their call.

Wow, there must be a lot of posers and scammers in other areas, because I don't take a hard line about prequalifying clients and yet, hmmmmm, I cannot remember a time when I have ever taken a client out and had it come back to bite me insofar as their being qualified.

Oh, wait, there was that one couple...oh, no, they were supremely well qualified, but, ooops, her sister got her real estate license and well, they were going to work with her, 'kay?

I've had a few drop off the radar screen for a few reasons...homes in other states didn't sell, job transfers, etc. but because they didn't qualify for a loan? Nope, to date, that has not happened. Amazingly, my clients have always been pretty sophisticated about knowing what they can and cannot afford, so I don't have too much trouble finding something for them that makes them happy.

I guess I am just one lucky agent, or perhaps it's because my business is predominantly referral, where the odds of getting a "bum" are pretty slim. And I guess I get a lot of referrals because, well, I treat ALL prospects with respect, don't put a lot of obstacles in their way to homeownership and hey, if they cannot afford to buy right now, I'll help them find a nice rental. I had one rental client send me over $2 million worth of purchase business in one year...so, yeah, bring on the unqualified, tire kickers! I'm MORE than happy to sit down with them and talk about their homeownership plans...it may not happy today or tomorrow, but when it DOES happen, I can pretty much guarantee I will be there to help them and in the meantime, they are going to tell their friends and co workers about this nice agent who didn't treat them like (insert your favorite expletive here).

Jon, thank you for

RECOGNITION to my post AGENTS across the country feel same as I do !

Article I authored agents..... might consider reading :

03/08/2009 Do you protect your seller … as listing agent … prevent being sued.

We as agents are also here protect ourselves and seller property

read the link

2 years ago made NATIONAL MEDIA Dallas agent MURDERED in a builders home,

several have been raped, therefore as agents allows us to

ID who we are working with on behalf of all parties thus pre-qualification letter verified

Apartment complexes here in Dallas

WILL NOT SHOW

ANY PROPERTY UNLESS you have an ID they can validate

Leasing agents keep ID in office while tour tenants on property return documents after showings

Therefore if anything should happen leasing agent

property management company fingerprints on ID shown

I definately want to see a pre-approval letter first, especially these days when lender rules keep changing and many buyers really don't know how much they can afford. What a disservice to everyone involved to have a buyer fall in love with a home they can't afford, or just as bad, maybe worse, to rule out a home that's perfect for them because they think they can't afford it.

We are professional people and this is a business. Serious buyers expect us to ask questions and they are forthcoming with information. Same with buyer contracts - we don't do work for sellers without a contract, why are buyers treated differently? All the repore and bonding in the world won't sell a house if someone can't afford it. Isn't better for all parties to know upfront?

On short sales, I require a pre-app before we set up an appointment. See BB's comments above. Just had one this weekend. They just wanted to see it but had no idea if they could afford it. I'm not sorry to say, I am truly am not interested in wasting their time or my time either.

On others, it is case by case. I don't have to ask when I meet someone who is well known in the community. It has nothing to do with fair housing. It has to do with using my gut and my knowledge of the locals. However, at times, I have been fooled by both types of checkbook - empty and full.

Personally, I think Lenn's way is best, and I should copy her business model.

Without a prequal or preapproval letter, they're not able to make an offer. If they can't make an offer, then they're not a buyer. I only take out buyers. Because that's what I do -- I help buyers purchase a home.

I told a buyer today that if she wants to see 200 homes over 6 months that I'm not the agent for her. I work with buyers who are motivated, qualified and ready to buy. They generally spend one or two days looking at homes and then we go to escrow. That's my business model. She asked me to wait 2 weeks until she narrows her neighborhoods and knows exactly what she wants, and then she'll call me. If you respect your time and set the standards, the truly serious buyers have no problem with that.

Jon, In my previous life, I worked with one of the most respected, fabulous, sucessful salesmen in a different industry. I would estimate that Pete was busier than 95% of agents, and I know he handled accounts worth much more money than them.

Pete would regularly FLY TO CALIFORNIA FROM PA to have LUNCH with prospective clients. He was happy to get the opportunity for face time and a chance to build a relationship with them.

Where is the disconnect in our industry?

I don't make people jump through my hoops, and yet, I don't work with unqualified Buyers. I'm happy to get in front of people, grateful for the chance to build a relationship and talk about the process, and then I help them find a lender. If I was ever a Buyer, and someone refused to show me a house before I spoke with their lender, I'd be furious.

I just can't imagine it....

Ditto (tritto and quatro:-)) to Jennifer Allan, Susan and Heather:-)

I can't imagie being treated like that while looking for THE MOST IMPORTANT thing I will ever own. Yep, not just expensive, important in all the ways that matter. Sometimes it may just take a few years and a few hundred properties to find the one to love. Reading most of these comments would lead one to believe that you guys are selling trinkets in Chinatown for an immediate recompense of a 5 dollar bill being flashed in your face.

It's a freaking HOME for people, and a crap load in commissions for the agent - a wee bit of consideration for the buyer is probably well deserved. After all, you are no longer the keepers of MLS data and keys - and I don't need a real estate agent teaching me basic finance. I need someone who will listen to MY wishes, and wants and needs. Someone who won't look exasperated after the fifth home, and someone who won't make me feel 'unqualified'.

Lun Smith said: "I think that it also shows the 'professional way' we conduct business. But, silly me, I also don't go into a car dealership unless I can buy one!" I'd like to ask you whether when you do go into a car lot you have your credit run and financial paperwork completed BEFORE you look at the actual inventory, or even before you take a car you liked for a spin... Just curious...

Maybe in other's markets it's a huge commission...worth the possible waste of time, but not everywhere. However, I see that others here with bigger RE fish still insist on working with qualified buyers.

So why are the various contributors so militant that qualifying is wrong? Why can't a looker be identified as a looker...we all know that one day they will buy, and we don't treat them like scum or something. But we also don't go around wasting seller's time and our time.

Lookers can go to open houses. They are free and no qualifying necessary.

Jon, we always make sure our buyers are looking at homes they can afford.

Not for us but for them. Back early in my career I would show then do the financing. That was a long time ago. Too many folks were disappointed when they found a house or condo they fell in love with and couldn't afford.

Now we show homes/condos they can afford and aren't disappointed.

Of course I don't agree that everyone should do it, it is your time, your clients and you are obviously successful doing it your way.

Dawn, I don't work with unqualified Buyers. I just don't use getting qualified as an opening salvo for the relationship.

Do you really have that many "lookers" wasting your time? Honestly?

I find if someone gets up the nerve to call a REALTOR to see a house, they usually are serious about starting the process. Starting the process, and they're looking for someone to guide them. If you jump all over them about being pre-approved, or have them jump through hoops to even rate a showing, I think you're probably losing a lot of clients.

I don't ever work with unqualified Buyers, but I am wiling to invest an hour or two to earn their business, build rapport, and then guide them on their next steps (getting preapproved).

Missy, that is the number one reason that I have Buyers talk to a mortgage lender - for their own sake. It only took one client who was heartbroken over not being able to afford a home to learn that lesson quickly.

Again, I think there's a general misconception that we're all saying, "Oh we don't qualify our Buyers." I just don't do it before I've invested in the relationship to earn someone's business.

To be honest, it's not really that big of an issue - most people get a general idea via the internet before calling a REALTOR, and they're usually not that far off. Unless it's just in my area....but I don't see people calling for appointments when they're that far off the mark on qualifying for that home.

Maybe it's just the tone? It certainly does seem like you and those who agree with you are saying that you don't qualify your buyers, and those who do are greedy, stupid, uncaring, snobs, etc. Am I reading that wrong? What are you saying then? When is it acceptable to ask for a pre-app in your opinion? How much real estate are the people selling who don't pre-qualify? I wonder.

Do I meet people and immediately say, show me your personal financial details - get real!! Trust has to be built - whether it is in person or on the phone, the connection has to be made. But trust doesn't mean I don't ask for pre-apps very early in the relationship. Even a million-dollar buyer understands that sellers want to know that a viable buyer is coming through their door.

Sorry, but posts like this always strike me as presumptuous and judgmental. I don't think they do the general public any service and they are destructive rather than constructive to other professionals.

Jon, I did not read all 62 comments but for me it is just a matter of instinct. There are certain people that I just feel comfortable taking out before I have that letter in hand. There are others that I'm not going out with until I have that letter in my hand.

To everyone.

I could not believe seeing so many comments coming. Thank you from my heart. Maybe this is the first time I see someone writing a post, with which so many, and actually the overwhelming majority, do not agree, and still I appreciate the overall tone.

1. So many of you are talking about needing the pre-qual letter of POF to submit an offer. But I did not get to the point of submitting the offer. I am talking about the time BEFORE we submit any offer, and, actually the time, without which there WILL BE NO OFFER - the showing. And yes, I will go and show without asking for any pre-qualification or any other pre whatever. And yes, while talking to people I will have an idea of the situation.

2. Realities of the market are very different, and I am in a different market than many of you. Out of our last 26 transactions there were only 2 that were financed, and one was a military officer and he needed nothing from us. Which leaves us with 1 financing that we helped to arrange.

24 people just wrote a check.

3. I do not waste the time of my Sellers. We mostly represent the Buyers, and what we have as our listings are vacation/second condos and homes or condo-hotels and they are vacant. As for spending my time, I am fine with it.

4. What surprises me is when I read how some of you invite people to your office to look at properties on the Internet, and educate them about the process... People who call me have found what they want on the Internet, do not need for me to educate them, and can educate me (and some do), and would not waste time or listen to me. They are Internet Empowered Consumers, who know what they want and need. "Can you show me this and this at certain time?" My option is "yes" or "No". You know what I choose. "Fine, see you there at....".

5. And the biggest surprise of all is that so many comments show that it is not what we do, but how we do it. And my impression is that it is ll about control. And this is where the danger is. If we are all about control, this is yesterday.

The new reality is that the customer is in control. And he will vote with his pocketbook whether you do the way you want, or he/she does it the way they want.

But this is the theme of another blog.

Thanks again for your thoughtful comments.

Lynn - Security concern is security concern. Pre-qaulification is not a security concern. You can take the driver license, and that would be it.

And I did not talk about security. I would also be skeptical to claim the support of the country.

JUN

Susan - thanks for a well thought comment. I am also surprised by the lack of belief in the intentions of the prospects. Luckily, I am not the only one, who is not really get burned by al those people who look... and then do not buy.

I have hard time to believe that when agents take people to show homes, they get an offer right there and then, to justify an affront

Dawn - I am not sure I follow you. I do it differently? Yes, but I do not call for every agent do it my way.

Yes, I was very surprised by the whole idea that this is the only right way to do, and the only reason it is not done, is because of those weak agents like me.

The idea that if we only could be uniform in our requirements, we would be able to force the buyers to do what we want and how we want is inherently wrong. Just read the comments with open eyes, and you will see that so often, and maybe too often it is a substitution of terms. I am talking about initial showing, and people comment about presenting the offer.

I do not believe in the miracle when agents take people and get to write the offer on the kitchen counter.

If you believe the comments represent our industry status quo, then Real estate is the busiest industry in the nation. Since when we are so darn busy? People who work elsewhere for $8 an hour and part time in real estate because they could not make it in Real Estate are saying that their time is so valuable?

Dawn, it is not a joke, some people who commented here work full time in other places to survive. And they would not take a prospect to show properties and make in one transaction what they are making in 2-3-5 months on their other jobs?

Heather - thank you for your passionate and to the point comments. There may be very few people who built their own system like Lenn Harley. Many others did not, and believing that there is a line to the door of their office, and that there is no other way but to start eliminating people by qualifying, or their valuable time would be wasted?

If they do not have the line, I do not see what can be wasted. If there are no customers, that time is not worth much.

Jerri - just wanted to address that this thhing with the price range. I guess there is a big difference between what people are looking for to live in and people who are looking at vacation spots.

Real example. A couple came to see the condo-hotel unit as they were attracted by the marquee sign with "Condos from$50K". They wanted to see it. They ended up buying a 3/3 luxury condo for $520K. It is really not unusual when you deal with vacation properties here. I can count more than a dozen deals similar to that. Does not happen every day, but 4-5 a year possible.

We usually do not see a problem for people to pay more (and in cash). It is usually that they come and they want to buy something really cheap, but then they do not like that cheap very much and end up buying more expensive properties. Often it is not that may not have enough money, but that made a decision not to spend more than certain amount, though they easily can if they decide to go higher.

Great post and I totally agree with everyone this post. One needs a trusted lender because they have to obtain financing to close the deal. Show me the money

Hi Dawn,

Maybe it is the tone, because I'm getting the same vibe from the opposite side :) The main thrust of this post is a rebuttal against "demand the proof of funds from the buyer before showing them the properties." The original post has "show me the money" repeated often, and to be perfectly honest, I think is disrespectful and degrading to consumers. I think you even agree with my point, and perhaps something is just getting lost on the interwebs :)

You state:

Do I meet people and immediately say, show me your personal financial details - get real!! Trust has to be built - whether it is in person or on the phone, the connection has to be made.

Exactly! We need to invest in the relationship and earn the business from our side before demanding these things from the consumer. I just don't get that many lookers who are totally not qualified for the homes they call me about to refuse to meet them at the home before they show me "proof of funds."

Maybe some people do, and I can respect that they have a different business model/area/demographic whatever. I still think it's disrespectful to reduce a PERSON to their FICO score and bank account balance. Even non-qualifiable people deserve our respect and a modicum of professionalism.

JUN

Jon, I am in a tourist town - some people come here for the 1st time and write a check for a house. Some people just want to look around and see what they can get for XX amount of money or even if they want to move here. I am pretty good at prequalifying - and most people who contact me are looking for a second home or home to retire to.

This is a small town - I can give them a grand tour and show a couple of houses in a very short time, and I do. I have a good time, too. I still like showing off our little town.

Virginia - That's what I like, too. Not just a house, but the area, giving them the feel of it. If they do not feel that I love it, why they should even like it?

And I understand the meaning of your "pre-qualification". We use and should use common sense and know whther someone is playing us, or not.

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