I recently dealt with a lender from a National Bank who insisted upon placing the amount that the buyer qualified for in the prequalification letter.
After many years of study and implimentation I have come to the conclusion that I am doing a complete disservice to my buyer by showing the listing agent that my client is capable of paying full price for the property. I would much rather submit a prequalification letter that says the following:
All the typical information in a prequal letter......Joe Smith, has been prequalified to purchase the property located at 123 Main St, Anytown,USA. All the typical lingo thereafter.
Don't get me wrong, this can only be done if the buyer qualifies to purchase the property. The lender argued the following,
"The realtor should be negotiating based on fair market value, not what you can qualify for. The letter needs to have some sort of figure to be validated."
I believe that I am not negotiating fair market value of the property. My goal is to negotiate a price well below fair market value....however I can not do that if the listing agent is aware that they are prequalified to purchase the property for full price.
Some would argue that this is in the best interest of my client and by negotiating a lower price, I am adversely impacting my commission. You are right. I owe my clients care, obedience, accounting, loyalty and disclosure. Their best interest is my main concern. I would love to know the opinions of those on Active Rain.
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