Here here!

Be serious with us, we will be serious with you! This is a business that involves alot of money, if you (non-preapproved buyer) want to waste time, just keep looking through Harmon Homes...

Seriously, it's a business, don't waste time if you(Buyer) want to buy a house...

Here in California, at least in the valley (Sacramento area) we are seeing sellers who want to see a pre-approval with a credit review...not just a lenders word.

Todd,

It's becoming a standard practice nowadays that agents require a mortgage pre-approval letter from a lender before taking prospects out to tour homes. If a buyer balks, then he probably isn't serious and would waste everyone's time. Must read for buyers.

Amen to that, Todd! I, too, have lost a customer or two because they did not want to be pre-approved before looking at homes. OH, Well!

I'm becoming more and more protective of both my time and the time of those involved in each showing.  I need to know that my buyers are as serious about this endeavor as I am.  You hit on another thing I've become much more conscious of and that is personal safety.  Too many scary things happening in our industry lately.  You've given a great explanation for practicing this standard.  I think the homebuyers will understand -- the serious homebuyers, that is.

If a client wants me to show them property without speaking to a lender first, I've got a couple of lenders who can get a pre-approval letter done pretty quickly, before we go out.  It does neither one of us any favors to look at property that is outside your comfortable affordability.  The very first thing I go over with a new client is what their budget is, and what they are comfortable with.

Rule #1:  Even if you are approved for "X" amount, it doesn't mean you have to spend that much!

Rule #2:  Plan your budget around the higher payment--that way you are buying a home that fits your life, not scrimping and clawing just to make a payment every month.

Rule #3:  I can't help you if we don't know your buying power--a PreApproval letter tells us that (not a Pre-Qualification Letter)!

I also explain that i don't want them to fall in love with a house, then find out after getting an offer accepted that they aren't approved for that much house.  I've seen it before nd it can be heart-breaking.  Good luck!

Very well said, Todd.  If they can't take 15 minutes out of their day to start the financing process, then the chances that they are serious is probably slim to none.

Todd, I will take someone out once to help establish a relationship.  Prior to that outing though I will email them a list of mortgage lender contact info (if they haven't decided on one yet) and also let them know that this needs to be addressed before we can narrow down the next home/homes to view.   I find this works well for me, and for them also. 

Very good point. If buyers are serious about purchasing, they should not object to being pre-approved first. In my office, pre-approval of buyers is required before they allowed to preview homes. Although a pre-approval does not guarantee a commitment, it does initially help to get all parties involved on the same page.

Todd, Point well taken and I am finding that serious buyers are going to the next level of actual mortgage approval to give them a leg up in the negotiations. After all what seller does not like the security of signing a contract knowing that the mortgage process is complete?

Todd,

Great post! The only reluctance I can see on the part of consumers may come from feeling they are committing to one particular lender...consumers like keeping their options open!!! Thanks,   Fran

Great information.  I wish some of the real estate agents I work with would read this post and heed its advice.

I think I just lost a client, too, for the same reason.  But like you said, I have many "qualified buyers" who I would rather spend my time on.

One of our agents was dealing with a buyer just yesterday that didn't want to get pre-approved.  We have already sold this client's house and he is looking to move on.  His point of view was that he didn't want to apply for a loan before he knew if the seller was willing to accept his offer.  He's very "old school", being in his 80s.  The agent tried to convince him that his offer would be taken more seriously if it was accompanied by a pre-approval letter, but he just flat refused.  She even enlisted my assistance, but I wasn't able to convince her any more than she was.  (We're both just young whipper snappers to him!)  It's quite rare for us not to show a pre-approval with our offers, but in this case we're doing it.  We put the buyer on notice that his offer may not be taken seriously or at the very least wouldn't appear as strong.  He has to be out of his house by next Monday!  Oh well... all we can do is advise.  The client makes the final decision.  If we weren't already working with this client and didn't already know he had the money we most likely would have just let him go.  If a buyer isn't willing to invest the 15 minutes, they are USUALLY not worth your 15 minutes either.  This is just one of those exceptions.  Thanks for the post.  I must admit, I never really thought of this as a safety issue.  Thanks for the new insight.  

Todd, I'm with you on this one and I let the buyer know they can use any lender they choose but without a prequal I won't show them property.