Do you have the ability to pay cash for the property?

Richard -- so true!  We ask(or should) questions in order to get to truth of the situation  -- as you state not all properties are eligible for particular types of financing or even a loan at all.

Congratulations on the feature... Aren't they fun...

It is amazing how few understand the intricacies of buying real estate ...

Happy Day

Richard ~ We didn't think there was any other way but cash for such a small sum of money for a home?

You are right - sometimes CASH is king, but not always.  :)  There are times when a buyer has cash and they think that justifies a low offer and it really doesn't matter to the seller, a financed loan will work just well!

We have properties in our area even with more zeros in the price that are cash only transactions due to their condition.

In our listing sheets, there is a section for "TERMS"  When the listing agent put in CASH, and only CASH and no other options, i.e., FHA, CONV, VA, etc. it's quite clear the property will not finance.

Amen to this comment:  Many buyers are not aware that just as not every person qualifies for a loan, not every property does either!!!!!

Richard~ all you can you is provide answers you believe. Others reactions are out of your control...All you can do is your best, after that just smile   :)

Richard -- I just had this type of thing happend.  After probing for about 10 minutes and trying to explain that the property required a cash buyer or a full renovation loan... I simply told the caller that they needed to talk to their lender about purchasing this home with "mold" and substantial deterioration... before I drove over 30 miles to show the home.

All homes must have a reasonable "net effective life" for the lender to be able to invest mortgage money in.  It surely sounds like this home did not qualify.  And the low loan amount made sure of it.

Also... if the buyer is thinking about purchasing it, putting some money into it, and then flipping it... it still might not qualify for a mortgage.  Not a good investment, methinks.

The problem is that the lower loan amounts tend to be considered high cost mortgages and more of a risk.  

Richard, I had a $1.2M listing several years back. I received a sign call off the listing. One of the first questions I asked was if they had been pre-approved. The caller went balistic. She told me it was none of my business. Of course, I told her it was my responsibility to make sure every buyer has the ability to buy prior to going through the house. Surely, she would want the same from her agent.

Richard - It's a reasonable question to ask in a situation that is likely to require cash.

Richard, if I encounter a buyer that is not represented, I think asking about their ability to pay for a property is par for the course. 

The buyer better have cash for such a small purchase. Lenders don't like to mess with small loans. No profit in it for them.

Richard, many folks out there barely have enough money to pay cash for the groceries.  But, I have a feeling things will get better this year... better for a lot more people than is the case right now.

Richard,

Not all that unusual on a first call that people are reluctant to give up any info on their finances. At the settlement table all transactions are cash...just not all of them from banks.

Rich

Richard, 

The worst thing an agent can do is waste precious time showing homes to buyers who cannot buy, so I agree with your questions and I feel if you are not comfortable as an agent with the answers received from the prospect and make the decision to still move forward then go at your own risk.  Me personally I cannot afford to waste time so I chose to qualify or atleast inquire with the buyer so I can make an informed decision before proceeding.

Good Post! thanks for sharing!

I think Debbie #8's reply is a good one - at least it sets realistic expectations.