Lately, I've encountered several buyers who simply don't want to take/make the time to get prequalified. Needless to say, I'm not showing them any homes, yet it remains perplexing why someone wouldn't want to take that first crucial step. RE101 says they're not really buyers. Experience and gut both tell me they really do want to buy. So what's the hangup?
1. A terrifying economy. Who knows what will happen next? Billions are spent, government programs bomb out, and the housing market is still sputtering. That's the big picture as many see it. On a personal level, a lot of folks are concerned about keeping their own jobs, or maybe they're facing furlough days, another rent increase or an impending mortgage reset.
2. When there are a lot of unknown factors looming, it's easier and more fun to live in Fantasyland. Just like a lot of folks visit open houses in price ranges they know they can't afford, some people prefer to stay in the dark and not know, vs. facing the reality of actual payment costs and perhaps having to look in their #2 choice neighborhood instead of their first choice.
3. Americans aren't used to-- and don't like-- being grilled over their finances. We just came through a gilded era when everything was increasing in value and spending power seemed limitless. See it, want it, buy it was the modus operendi. And with most other purchases, you can spend hours looking and dreaming, without a pesky salesperson demanding that you show your money and prove your worth upfront. Cars, clothing, home decorating... all of these potential purchases provide venues where you can shop to your heart's content, without any form of pre-commitment.
The internet also provides unlimited opportunity for people to home shop and endlessly tour hundreds of homes, without any commitment at all. But how productive is this for someone who really does want to buy?
So here are a few points to ponder for buyers-to-be:
1. A good agent practices TOUGH LOVE. We won't let you waste your time, or our time. You wouldn't go shopping without your wallet, would you? If you had to buy a dress for a special event, you'd check your finances first, then you'd know whether to go shopping at Nordstrom or Wal-Mart.
2. Sometimes it helps to see things through the seller's eyes. So-- let's say it's 5 years from now, and you are now the seller and ready to sell. Four offers are presented to you. You want to sell quickly to the highest offer which also looks like the one most likely to close. Oh, what's this? One doesn't have a preapproval letter, or any indiciation whatsoever that this person has any money at all? You'd never even think of considering that offer, would you?
3. A good REALTOR(R) knows what they're doing, and we're only the first ones who will ask you to be financially accountable. Just wait until your lender, the bank/seller, and the underwriter get to you! They will truly grill you. Even for their favorite customers-- double income high FICO W2 same job for 30 years people-- they will scrutinize every last penny and where and when it came from. At that point, you might even miss my gentle-but-firm preapproval prodding!
Do you really want to buy a house during this great time to buy? Get preapproved now.
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