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The Chicken and the Egg of Real Estate

Reblogger Cyndi Mino
Real Estate Agent with First Team Real Estate

There is a good reason why we ask buyers many questions prior to showing them homes and this blog is one very good reason why

Original content by Cynthia Larsen CalBRE# 01433049

The chicken and the egg. Which comes first? When a potential buyer calls and wants me to show them a home, one of my first questions I ask is are you pre-approved for a loan? The reason for this question is simple. If I don't know what you are qualified for, I will have no idea what homes I can show you.

Buyers, I know this may not be what you want to hear, but you MUST get pre-approved for a loan before asking to be shown homes. Your pre-approval letter contains very important information.

  • The maximum purchase amount - It makes no sense whatsoever to show you homes that are above the maximum purchase amount you qualify for, unless the home is overpriced. That I can determine by looking at comparable properties that have recently sold nearby.
  • Whether you have chosen a direct lender or a mortgage broker - If you are using a mortgage broker, I cannot show you HUD-owned homes. HUD requires a pre-approval letter on a direct lender's letterhead.
  • The type of loan (Conventional, FHA, VA) - If you are qualified for anything other than a conventional loan, buying a condo or a "flipped" home can be very difficult and time consuming.
  • Loan and/or Funding Conditions - We need to talk about your ability to provide documentation the lender requires on a timely basis.

I understand that you might not want to get pre-approved until you find the right house. Or maybe you won't want to buy a house at all if you find out that $xxx,xxx can only get you a home in need of TLC in a less than desirable neighborhood.

We won't know that until you get pre-approved. In Real Estate, the pre-approval letter must come first. Let's call it the chicken. After that, we can go out together and look for that perfect egg.

 

 

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© 2010 - All Rights Reserved

Cynthia Larsen
Broker/Owner - Safe Haven Realty

Sonoma County, California, USA
(707) 332-2560

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Santa Rosa  --  Petaluma  --  Rohnert Park --  Sebastopol  --  Penngrove  --  Cotati

Curt Baumgarth
Mesa, AZ
inactive

You are so correct Cyndi, the loan questions, hints, suggestions can save a Realtor so much time.  You just have to do it or you will be sorry!

Oct 02, 2010 03:03 AM
Gordon Sloan
Group1 Real Estate, selling houses in Salt Lake City Utah - Salt Lake City, UT
Salt Lake Homes For Sale, Salt Lake Real Estate

Well, as usual, I am out of step.

Generally in todays market the buyer has been searching the net for homes to buy. The first contact starts with a phone call and a  list of homes that a prospect wants to see. They have been on the internet and saw some things that they thought they might like to buy.

A clue is, they want to buy a house.

I am not going to tell them or imply over the phone that they may not be able to afford one of these homes but if they contact a lender and get a letter then I will schedule a showing.

If I give them the name of my lender they may or may not call them. If I leave it up to them, the lender they call may have an agent that they work with and connect them. More than likely they will call another agent.

I have given away any chance of developing a relationship with this prospect.

Ideally I would ask the buyer if I could conference in a lender that we could talk to and then let them work out qualifications while I looked up the properties.

If I cant reach a lender then I will probably schedule showings and use the opportunity to sell a house that they have found, and/or develop enough of a relationship when we meet face to face that I can explain the value of consulting with a lender.

The point is, they qualify for something, and I want to be the one they are talking to when they find out what that is.

Since I haven't seen every home in my territory I also have the opportunity to preview homes so that I can talk about them like an area expert to future prospects.

This is a funny business. We really dont sell houses. We sell the opportunity for us to be the ones to help folks buy the home they like.

Sorry this is so long, but it makes no sense to me not to nurture every phone call.

 

Oct 02, 2010 04:04 AM