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How much info is too much between a home buyer and seller?

In the initial stages of negotiation between a home buyer and seller, it is customary to provide the buyer's pre-qualification letter from their lender to show the seller proof that the buyer is qualified to buy the property. But if the sellers ask for more than that before the terms are negotiated and signed, how much more information is too much?

I had a buyer today provide the sellers in a written letter an estimation of their net worth and assets and value of their investments and annual income. Is this too much info because the sellers now know approximately how much my buyers have and can potentially raise the purchase price or change the terms to their favor?

Posted by Thavisak Lucky Syphanthong on 03/20/2008 12:00 AM

Comments (8)

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8 Comments on How much info is too much between a home buyer and seller?

MAR

2008

Sellers take a big risk when they assume that a buyer who can afford to pay more, will actually pay more.

If I make a cash offer I dont have any problem showing the Seller I have the funds to buy and get the deal done quick. Hopefully I have much more funds than needed. I require my clients to do the same within 7 days on a CASH offer. On all other offers I just provide the lender's pre-approval letter.

Usually if it's a cash offer, the buyer can provide a bank letter signed by an officer of the bank stating sufficient funds are on deposit. I don't really see any reason to give net worth estimates but if you're the listing agent, take all you can get.

I agree with Guy & Randy. The only time we ask for proof of funds is if it is a cash deal. We usually get a letter from a bank stating that they have sufficient funds, not an exact amount. In the terms of the buyers needing a mortgage, we have their lender fill out a "loan disclosure" which includes what point of the application process they are at: pre-qual, pre-approval or approval.

If they were my buyers I'd prefer they didn't disclose any information that wasn't necessary except for instance a pre-approval letter from a lender which should be sufficient to show they're serious and qualified buyers - what they can afford to pay and what they are willing to pay are indeed two entirely different matters and I agree with the previous responses regarding a cash offer - but net worth etc. - especially if they're obtaining mortgage financing seems - (in answer to your question) - to be much more info than needed in my opinion -

Why in the world would the buyer choose to give that information to the seller?

It is too much info. All the sellers need to know is that the buyer is qualified and pre-approved. Anything else is being nosy.

I agree with all of you, in this situation, the sellers requested a letter or statement from the buyers saying that they are financially strong and able to go through with the purchase because the buyers returned the signed counter and contract after their alloted 3 days and the sellers now have another offer on the table.

I told the buyers to write the letter but did not expect them to come back with full disclosures of their assets, net worth and annual income. Either way, we have already submitted the letter to the other agent and awaiting their response.

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