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What is your desired monthly mortgage payment? In other words, are you comfortable with paying XXX per month for that dream home? The first time home buyer will usually have an amount in mind that is one third the payment per month for that million dollar home.
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27 Comments on Why Can’t You Show Me Properties Before I’m Preapproved for a Loan?
Well-written and much appreciated; that's exactly why I re-blogged it!
Celeste,
It's such a huge job to find a good home for a buyer with lots of homework involved for the agent that it doesn't make sense to go out looking before the buyers do their homework.
Can you imagine telling a builder to build a home with out having a realistic budget?
It's called pre-qualifying in marketing terms and is used in all smart sales industries!
All the best, Michelle
Well put...........I especially love your last statement about broken hearts!
Thanks Lanette!
Michelle: I feel the same as many others do as well. It's the most important part of the transaction ....to even get started.
Woody: How many go to Open Houses (without an agent) and love the home and want to buy it...only to find out they don't qualify? They are wasting so much time and can get prequalified in a short amount of time and better yet...get a Realtor® and they can schedule many showing appointments within that price range :)
Hi Sally... that's an excellent assessment and rationale. The disparity between what a buyer wants and what he/she can afford still exists and reconciling that gap from the outset benefits everyone. I wish that more home buyers seemed to understand that.
Steve.....gets down to wants vs. needs right? I want to have no bills...reality....there are always bills :)
Sally, no need to waste everyone's time until you know that they are good for the loan...
Great post, I will usually take my buyers out the first time even if they are not qualified for the sole purpose of them getting to know me and used to the idea of working with me. From there they can develop a comfort level with me and be willing to take my direction of getitng them set up with a lender and work on getting the approval needed to buy a home.
Sally
Getting pre-approved is such an important part of being prepared to purchase. So many do not do this in advance. And you are right - knowing your budget, in addition to what the bank says they will loan you, is key, and those may be vastly different depending on individual life styles.
Whenever someone says "oh ot will not be a problem" that is a red flag, especially in this day and age of stricter bank rquirements (unless they are paying cash, of course).
Jeff
Sally,
Great topic; the wisdom of obtaining a lender's pre-approval bears repeating.
Steve
Sally, I just went through this last week with a buyer that wanted to see one of my listings. I did bring them in, but also went through the story if getting properly set up with a pre-approval. When they did go through the process, they learned that they were not qualified for the home they wanted, but they will spend their time looking for something within their range, and yes with me.
Michael: I agree..
Stacey: The reason I'm saying this is because I did that at the beginning of my career....why even go through a few hours of "getting to know you" while driving around when you can sit at your office and do the same? Then, at the same time go through the process....starting with the first most important part.....the qualification? I find that while showing property we are in the second stage and I can spend the time with them talking about the next step. Putting in an offer.
Jeff: And even then...we need proof of funds. So many say all cash and then when you ask them for that (because it is a stipulation with the acceptance of a contract) they go missing lol
Steve: Of course it bears repeating...it IS the first part of the process. Everything else is mute is they cannot qualify.
Hey Ed...Now that is what I'm talking about. You had the chance to talk to them and go through some of the process....and they were able and willing to go the mile to get qualified...AND...stick with a great Realtor®
Sally - Getting pre-approved is an absolute must these days. Most buyers (especially first timers), tend to have much bigger wish lists than their budget can afford. JMHO Hope your Sunday is going well. :)
Sally, you nailed this one. Nothing more to say!
"Why Can't You Show Me Properties Before I'm Preapproved for a Loan?"
My answer - NO pre-qualifying is your first step!
Very short and sweet and so well said!
Featured in BananaTude
Sally, Realtors send me their Buyers to be Pre-Approved all the time, and it is a good thing that they do, because a large percentage of them are not in a position to purchase a house, income wise, or credit wise. If they had not taken the precaution of having them Pre-Approved first they would have spent a lot of time showing them houses that they can not buy.
I think the majority of us agree that getting preapproved is the first step...and the most logical so both sides are not wasting time looking/showing houses that are not affordable to the client.
I mean...why even get someones hopes up by showing property without knowing?
All I can say to this is OY! I REFUSE to show people properties if I don't have a preapproval! There are plenty of agents that will, so they can move on if they want to and that is fine with me but I refuse to waste my time and energy if they can't even comply with something that simple.
Sally, it saves everybody, the sellers, buyer's and agents a lot of grief, nice article.
Excellent post! It is better for the buyer so that they will look only at homes they can afford. Also, if they are not in a position to qualify for a mortgage, they can start repairing any problems sooner. A good lender will work with them to develop a plan to position themselves for approval.
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