FAQ #3 for Buyers: Why do I need to get Pre-Approved BEFORE I See Houses?

By
Real Estate Agent with Cedar Rapids/Iowa City, IA KW Legacy Group S44645

I had this question today from a buyer that called me about a home that they viewed on Realtor.com.  They had been visiting open houses and calling on signs all over town and every time, the listing agent just popped over there and SHOWED THEM THE HOUSE!  This apparently happens a lot more than I thought!

So, I asked the potential buyer for the property address, their name and phone number, and then I told them that I would call them when I got back to the office.  30 minutes later, I called the buyer back with the information regarding the house that they had called about.  Here was our conversation:

Potential Buyer:  When can we see the inside of the house?

Karen:  Are you working with a REALTOR?

Potential Buyer:  NO.  We are just starting to look and we just call the name or company on the sign and talk to the agent that has the listing.

Karen:  Have you been pre-approved for a mortgage?

Potential Buyer:  No, but we just want to see the house.  All the other agents let us see their listings, so why won't you?

So, the question of the day is this:  Why do I need to get pre-approved before you will show me houses?

Answer comes in three parts:

1.  Whether you are asking to see my listing or any other agent's listing, it is courtesy to only set up showings for clients that are already pre-approved and qualified to purchase that home.  Especially if the seller is occupying the home, we have a responsibility to only show their home to qualified buyers.  You would feel the same way if it were YOUR home!

2.  Since you are not pre-approved to purchase a home, it does not make sense for me to show you any homes.  Being pre-approved and qualified to purchase a home shows a sense of good faith that you are truly in the market to buy.  Right now, you do not know what type of loan that you best qualify for, you do not know what you can truly afford, and you have not committed to the home buying process with a REALTOR. 

3.  What if this home is THE ONE?  You cannot make an offer without the pre-approval letter from the lender.  And if there is another buyer that is prepared, they have already done that and will beat you to the punch by writing an acceptable offer before you can get the qualification process done.  You cannot compete without that letter.

The last thing that you want is to find the home of your dreams and then find out that you cannot afford it.   Sooner or later, you are going to find a house that you love and because you are not prepared to make an offer, one of two things may happen:

1. You may lose that house to another buyer

or

2. You may PAY MORE THAN YOU WANT because you are COMPETING with another buyer. 

I would love to represent you for your home purchase!  But we need to be prepared to write an offer if you find that perfect home--so we start with getting pre-approved with a lender!

Call me for your free home buyer consultation and we will figure out exactly what it will take for you to see all the homes in the Cedar Rapids area that meet your needs and price range.....AFTER you go to the lender!

Keep smiling!

Karen

 

 

Posted by

 

Karen Feltman, REALTOR®, ABR, AHS, CHMS,                                                                      CNE,CRS, e-Pro, green, GRI, SRES, TRC

Keller Williams Legacy Group

4850 Armar Drive SE Ste B

Cedar Rapids, Iowa 52403

Email: karenfeltman@gmail.com

Mobile  319-521-0701

www.KarenFeltman.com

Licensed in the State of Iowa

© 2010-2018 by Karen Feltman, Cedar Rapids/Iowa City Relocation Specialist 

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31 Days of January - New Years Resolution
Tags:
mortgage preapproval
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Rainmaker
1,041,251
Charles McDonald
Charlottesville Real Estate Solutions - Charlottesville, VA
REALTOR®, Blogger, Principal Broker®, Owner

Great Point, Pre-Approval can save everyone a lot of time.

Your friend in Charlottesville

Jan 06, 2011 10:52 AM #1
Rainmaker
528,812
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

@Charles-It saves time and frustration on all sides.  The seller that is preparing their home for a showing would like to think that the person coming to see it is qualified to buy it!  Thank you for reading.

Jan 06, 2011 10:59 AM #2
Ambassador
337,120
Melissa McKinney
McKinney Realty Group - Fayetteville, NC
Realtor, www.LivingFayetteville.com

Karen~ I agree with you 100%. I don't want to waste their time, my time or my sellers time with showing a home that they don't even know if they can buy... I feel bad I really do but if they are really serious then they will do what needs to be done.

Jan 06, 2011 12:19 PM #3
Rainmaker
289,867
Ellie Penaranda
239.776.5077 Downing-Frye Realty - Naples, FL
Naples Florida Real Estate - Waterfront & Beach Co

Karen, you covered this subject very well.  Buyers need to show a commitment and no one is going to argue that the first step is the pre-approval.

Jan 06, 2011 12:23 PM #4
Rainmaker
528,812
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

@Melissa-I think that preparing them for the home buying process is important and the first step of getting in to see a lender is so important!  It will determine where their search will actually be.  If the original house that they called about falls into their list, that is great, but sometimes, there are so many other options that it falls off completely! 

Jan 06, 2011 12:24 PM #5
Rainmaker
528,812
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

@Ellie-I think that the most frustrating part of the conversation for the buyer was the fact that I was not going to give in and just show them the house like the others had previously.  The parent in me wanted to say "because I said so" but I knew that explaining why was a better way of showing my professionalism!  It truly is important to be prepared and by the time that I explained why it was important, we were scheduling our buyer consultation for this weekend along with the lender appointment for Monday.  Once you understand the why behind the request, it makes more sense to buyers and they are willing to trust that you know what you are talking about!

Jan 06, 2011 12:32 PM #6
Rainmaker
442,512
JoAnn Moore
The Mortgage Market of Delaware - Georgetown, DE
Home Loans in Delaware

Nice clear, concise reasons for potential home buyers to get pre-approved before expecting to be shown homes. Good post. 

Jan 06, 2011 01:03 PM #7
Rainmaker
528,812
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

JoAnn-Thank you for reading!

Jan 06, 2011 01:39 PM #8
Rainmaker
601,332
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Karen - THANK YOU!  THANK YOU!  THANK YOU!  I wish all Realtors/agents would do this before "just popping over and showing them the house".  Talk about wasting theirs and their sellers time.  I want to scream every time some Realtor/agent or their clients calls me telling me, "you have to approve me for XXX amount" because their Realtor/agent just showed them some property even though they had not spoken to a lender or been pre-approved.  SERIOUSLY!!!

Jan 06, 2011 04:07 PM #9
Rainmaker
528,812
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

@Donne-Nothing like holding your feet to the fire!  I would guess that you also get the ones that go ahead and write an offer and say that they are working with you before you have the qualifying done.  What if they do not qualify?  Now they have a seller that accepted an offer from someone that is not financially able to fulfill their side of the contract.  That is a waste of time in the worst sense.  It certainly would not give the agent a very good reputation if they did that with all their buyers.  I would rather get them in to be qualified so that we know if we find the one they want, they can afford it and we know at what terms we need to offer.  Thank you for reading!

Jan 07, 2011 04:45 AM #10
Rainmaker
400,528
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

Great reasons why someone should be pre-approved for a mortgage. Its always best to know ahead of time what you qualify for and if there are any snags that need to be addressed BEFORE the client finds the home of their dreams.

Jan 07, 2011 04:52 AM #11
Rainmaker
528,812
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

@John-I think that it always pays to be prepared for finding that perfect home.  That means taking the time to meet with the lender and know what you need to ask for!  Thank you for reading!

Jan 07, 2011 06:09 AM #12
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Karen Feltman

Relocation Specialist in Cedar Rapids, Iowa
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