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Googling.

For whatever reason, I decided to google "no doc home loan".

I knew what was coming. It wasn't "fun", but did offer some hindsight. I did NOT see a bank ad seeking, "pulse only"- rather, nicely written explanations of available loan instruments, with one sentence including, "no income verification for those that cannot properly document income"- dated late 2006.

Having been in a new home arena in 2006-2007, I missed the pulse party, because my customer profile paid cash for retirement condos in NY- never did see an over-55 get a loan (their properties were going wild in the beginning)...

It's got to be a crazy ride for real estate agents that began their careers in such an environment- how on earth is a "new" (2004 and newer) person supposed to have a really good feel for right/wrong when so much was force fed as "acceptable practice" when determining exactly who COULD buy a home?

On the OTHER side of such an odd entry into the market, it would seem that it's time for the NAR and local chapters to initiate, for the uninitiated, the RIGHT* way to conduct a real estate transaction- without a major injection of education for the less seasoned (and not neccessarily unethical by nature) the industry could lose good people unable to figure out this "new" (old) market.

I'm talking less about force-feeding transaction ethics than I am about really familiarizing agents with loan programs that will achieve closings in a market that demands far more than a "pulse".

A good real estate agent having entered the market at a heady time must understand, as we crash land, that unqualified buyers submitting offers (and potentially frustrating a frustrated seller, in addition to the potential of GOOD buyers on the same property) will result in more chaos...and we've all had enough chaos.

BUYERS NEED TO BE AT THE BRINK OF FULL APPROVAL BEFORE SUBMITTING OFFERS.

Take your time, as a real estate agent, gathering what works within your own level of competence- take all the time that you need to establish that what you "have" is, indeed, a buyer for a seller.

*Right is subjective- whatever the climate dictates is not "wrong", if legal. Ethical is a different cat, where common sense is considered a paramount element.

Posted by Laurie Mindnich North fork Long Island Real Estate on 11/04/2008 05:25 PM

Comments (13)

Qualification in the ActiveRain Channel

mortgage mess

Originally posted at: : Googling.

Post is included in group: Colorado Real Estate
Post is included in group: I Love NY
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Post is included in group: Real Estate Law

13 Comments on Googling.

NOV

2008

And when the buyer comes in with a pretty much approved loan letter then it surely means more of a serious buyer. And....common sense it would seem would flourish right about now. :)

It's a catch 22. We want our buyers approved before making an offer... and some sellers don't want buyers even in their homes without approval... but lenders want to see a contract before giving approval. I've always had trouble getting this situation resolved.

NOV

2008

I've read posts here about doing your sellers justice by screening TOO HARD... as in chasing buyers away (some are legit) if you quiz them or make them jump through hoops before you'll show them a house. I always screen my buyers.

Every time I break my rule, it seems I regret it. I showed a very high end home here a few weeks ago to someone who called in on a listing and he was very quick with me on the phone, traveling... no time to get to the bank for a prequal. He's in town a few hours and wants to relocate here. He has to see this house. Well I jumped when he said HOW HIGH. And when he (and his wife and friend and son) showed up I realized immediately I had made a mistake. Big mistake.

Not only wasn't he qualified to see the home (I am sure), but I had a security issue on my hands as the 4 adults scattered throughout the house. Really rattled me. It was an occupied house with STUFF in it and I had 4 adults taking off in 4 directions ... bedrooms, the guy's office, kitchen, family room. It was NOT GOOD.

Sally Jo- deciding (based on fact gathering) is what we have to do...BEFORE submitting offers to sellers that need these facts!

Lisa, if it's my listing, no problem if a showing occurs with a less than qualified buyer- that's the call of their real estate person at that point, and it happens sometimes. To consider writing an offer, however, without "full" approval is what's so annoying ("full" being "subject to"- "final" obviously not possible)

Erica, that sounds harrowing (and horrible). My feeling is that anything that brings a buyer and seller together is the point at which BOTH need all of the facts- an ill qualified buyer fits nowhere in the equation, yet it seems happen. Fairness to the seller would preclude this nonsense of a buyer that should have been examined before the offer was submitted!

Hi Laurie ... I came on board in '06, which is very different then '04 (at least up here). I never knew that bubble market, but some questionable practices did linger. However, from the beginning I made sure to learn and question. Once you understand, it is less likely you will fall into unethical territory. I can see how confusing it could be if you were in the business earlier. I agree....

Hi, Marie- I've seen some residual mind sets that can't quite let go of "anything goes" with a mortgage. It's not intentional, just a learning curve that, unfortunately, can wreak havoc for sellers and legitimate buyers until reality is accepted.

NOV

2008

Yes, I agree. This business is scary sometimes!

NOV

2008

Here I am catching up again!

I have gotten to the point that I won't show anything without that prequal. The journey is bad enough these days without that too...if a Buyer won't do that step...I don't consider them serious.

Of course I have no Buyers now so it's a moot point! LOL

(How was your baby visit?)

Joan, I wish that all real estate people would have your philosophy, particularly on an offer that will interfere with others! Hope all's well- we got lucky recently, but this is quite the challenge.

The trip was AMAZING- tried to link a pic, but it didn't- weather sunny and 70's, with a baby just as perfect!

NOV

2008

I have been in this market less than 3 yrs so it's been interesting! I just wrote a post about pre-approval being so important...you are right, buyers need to be pre-approved before submitting offers in today's market!

Patricia, you're proactively creating "good" buyers for sellers, despite entering (and learning in) a horrible learning market. The company you work for is lucky to have you!

DEC

2008

Thank you Laurie. You have hit on my latest frustration. As a Realtor who just came into the business in 2006, I still consider everything as a learning process, and therefore have readily accepted your plea that "BUYERS NEED TO BE AT THE BRINK OF FULL APPROVAL BEFORE SUBMITTING OFFERS." I recently received an offer from a "seasoned" agent that included no approval letter or proof of funds. The type of financing was vague as well. When I told him the seller wanted some evidence the buyer was ABLE to make the purchase, this agent seemed shocked at the idea. I couldn't imagine tying up the property in a transaction that we have no reason to believe could close.

Mark Duncan ~ John L. Scott Real Estate, Olympia, WA

John, the residual learning curve would be a whole lot less problematic in a more normal market (seasoned agents are as vulnerable as more "recent" agents to request less, out of habit) but with real buyers a scarcity, there's plenty of time to go through the prequal steps before considering tying something up- I don't know why this is, but when a non buyer enters the picture, a real buyer seems to be there at the same time- even in this market! We need a clear path for the real buyers, and sellers are freaked out enough, without discovering too far after the fact that their "sale" never was.

Spend all the time neccessary to locate properties- show them 100 (it's your dime)- just don't consider making an offer until the bank has offered a green light in writing, because then it's a sellers dime. Opinion. Thank you for the comment!

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