Why would the Realtor do this?

Good business practice is to have your buyers prequalified, show them only properties they qualify for, and hopefully find and settle on a house. Repeat the process and life is good. On the other hand show everything and anything on the market then see if they qualify and feel the frustration set in.

Karen,

that was pretty much every first time home buyer deal I did from 2004-2007, and it still happens today. just not as much. It would really bother me that the agents would just go along with it, yes we both make more $$ if deal is higher but not enough to warrant me begging my UW to override a higher DTI,that is why we have so many foreclosures.. 

I will not put my name on  deal with is foreclosure waiting to happen ...

I have always told my buyers, DO NOT LOOK AT HOMES THAT ARE AT THE TOP OF YOUR DTI. but 8-10 would stil do it or at least attempt,

Occasionally I have a buyer who suddenly decides to buy a higher priced home. Before embarking on showings, I ALWAYS call the loan officer to find out if they qualify for the higher amount, and sometimes they do. Not talking with the lender ahead of time is crazy.

Nope, not to me. It's a disservice that's for sure to the seller. That's a lot of negotiating room if they think they can get it for a lower price. 

Flash to agent - call lender before you even think about showing properties above the lending letter established limit.  If you feel that there are changes in the buyer's situation that should be re-evaluated by the lender, by all means, communicate and provide detail to the lender.  Don't you have enough to do other than day-dreaming in technicolor and providing your buyer with false hope (and probably losing them, too)? 

I'm sure, Karen, that this agent no longer has, if he ever did, your respect, and any offer that makes its way to you that has his name associated with it will be given a thorough second look, with deserved prejudice.

Buyers deserve a competent professional AND an advocate representing their best interest.  Certainly you can show slightly above their pre qual limit in the hopes a low offer will be negotiated.  However, to encourage the buyer's interest in a property beyond their means is a lack of expertise in my opinion and the buyers should fire the agent and the LO should contact their broker.

Some people just believe what they hope to be true - and ignore the facts. At this point you couldn't even give them a letter at 125 - right? You're waiting for new documentation.

Maybe they think if they can get you to SAY they can buy this house, then it will be true.

Is this a new agent?  Doesn't make any sense to me!

It seems to me that the agent AND the buyer are to blame here. The agent is at fault for showing the buyer properties that they cannot afford and the buyer is at fault for allowing themselves to be shown properties that they cannot afford. We all know what happens when you show a buyer homes above their limit. Nothing in their price range will ever compare. Karen, fortunately most of us possess a little common sense.

Sometimes we as agents loose control of the client or d not have the full story from them.  When they want to see a house outside of the budget I tell them they need to talk to the lender first.

An agent should be putting the clients' needs first, and it's difficult to see how encouraging the consideration of homes beyond their means accomplishes that.

I'm sorry if this was already asked and answered, but had you been in contact with the agent before this?  Had you provided the $125k approval or was this Realtor just showing properties blindly and possibly believing the clients that they were approved for that high amount? - Kasey

Wow, this is the same blog but from a lenders perspecitve. Just yeterday I read another one from a listing agent with the same frustration. Hope the fad ends soon:) Sounds like the buyer needs some gift funds, fast:)