For buyers, obtaining pre-approval is crucial in today's market. Given that money supply is tight, and the confidence of lenders in the housing is not much, knowing how much you can finance is very important. This post by an associate of mine may be common sense, but it's quiet relevant in this market.
The importance of a pre approval cannot be understated.
It is unfoprtunate that at times this industry operates backwards. You wouldnt go test drive cars that you couldnt afford but in our industry it is common for buyers to preview properties for long periods of times before they ever speak to mortgage banker. There are many reasons why this happens.
Buyers and agents are connected online when buyers inquire about listings. Its then up to the agents to refer the lender. The buyer never comes from the lender and refered to the agent. The customer always comes to the Realtor first, because thats who has the 'product'.
As an agent we are inthis situation put in a tricky spot. Lets say a buyer inquires to me about my listing on a website through email.
Now its wrong to assume anything about the buyers ability to purchase a home in the range in which they are inquiring but also I dont have time to just show any listing to any customer who hasnt yet or isnt willing to get an approval.
Problem is that there are literally thousands of other agents that are hungry for business and have little else to do and they will be MORE than happy to show said buyer 396 homes at 400k before they speak to a lender and find out they can spend 280k. Now its off to see another 396 homes.
So you see the 'buyer' has so many options and there isnt enough language in the dictionary to convince the average buyer that first getting a quote is the logical and proper way to go about this. Once you have mastered the art of easing this financial obligation in your "pre-clients" head then you are truly capitalizing on playing the numbers game online.