Admin

Pre-approval letter...A waste of time or worth holding on to?

By
Real Estate Agent with Exit Realty Properties

Gas prices are rising again, cost of expenses is getting out of control. We are in a market where closings are few and far between so I myself. How many properties do I show and how do I decide who is wasting my time versus who should earn my time?

Not too long ago, I worked with a lady who showed me a prequalification letter that showed she was approved for $400k. In one week, including Sunday, I must have shown her no less than 25 homes. 2 offers after, she decided that they were not really interested in buying because they didn't realise that taxes and insurance were that high.

 Even with the letter, I asked our in-house mortgage broker to do one and he confirmed that they did not even qualify for 300k. What an insult? I was made to say the least.

Colleagues, friends, fellow realtors; if you can help it, get a second opinion on those letters before you put your key in the ignition. It is too expensive right now to even get into your car without conducting a second check on the customer's ability to afford the homes you are going to look at. If all else fails, ask them to take a drive to the area and see if they like the area. 

Anyone can get a pre-qual letter so if you have any suggestions for everyone, please share.

 

Afie Makinde

Exit Realty Properties

Amanda Evans
DFW Living - Fort Worth, TX
Real Estate Broker - Fort Worth Texas
I think just about anybody can get a pre-qual letter and most can even get a pre-approval letter.  It's always a good idea to get a reliable opinion prior to showings with a buyer.  As a listing agent, when an offer comes in, I call thelender and ask very pointed questions before moving forward into a loan contingency deal.  If I am not comfortable, I recommend to my seller's that we get more earnest money than normal and it is not refundable after the finance contingency expires.  I've seen buyers magically disappear when they are asked to put up $2500 for a $120000 house that they plan on putting 10% down at closing in 3 weeks.  I'd rather know now than later regardless of whether it's a buyers market. After all, it's only a buyers market for those that can close escrow.
Oct 01, 2007 02:43 PM
Amanda Evans
DFW Living - Fort Worth, TX
Real Estate Broker - Fort Worth Texas
I hit send too soon....I wanted to add that it happens to all of us!
Oct 01, 2007 02:44 PM
Afie Makinde
Exit Realty Properties - Coral Springs, FL
Realtor, Broward County, FL
I agree and thanks for the comments. It is a constant learning industry.
Oct 01, 2007 03:09 PM