I'm not being mean when I ask you to be pre-qualified to see Lake Sinclair property

Hi Tammy,

Great advice. Pre-approved buyers can definitely have a stronger negotiation power than buyers that are not pre-approved. This weekend I had the same conversation with a buyer who refused to be pre-approved, so I refused to work with her, and I honestly wasn't being mean, because I strongly believe pre-approval is the way to go!

I am of the school of thought that you should know how much you can qualify for. Then you look at homes and provide a pre-qual letter based on the purchase price of the home you want to purchase. You don't want to show a pre-qual letter showing 850k when you are making a 400k offer.

As the professionals in this industry we know the changes to the rules of lending that have taken place over the last few years, but I wonder how many of us have educated the buying public to how the changes can affect their ability to buy.  Every day at the call center I speak to 8 to 10 customers who have heard about some super low rate and just expect me to offer it to them.  Even though they may be 150% underwater and only qualify for the HARP 2.0 program. 

I spend more time educating refinance customers who more often than not tell me they wish I had been their MLO when they bought so they would not have been in the spot they are in know.  We have a job to do and we better do it starting now or we will have another government agency dictating to us how we must take care of these buyers.  If we are going to control our industry from both the sale and the finance angles, we have to take charge and slow down the process and educate.  Anyone want to co-develop a training program to educate and inform and coach the buyer, just get in touch it needs to be done.  The sooner the better for us all. 

The fifteen to twenty minutes of time spent learning the new guidlines as required by Fnma , Fhlmc and VA-Fha can save you thousands of dollars over the life of the loan.  At least offer the thraining and you will have the office filled with the better educated and prepared buyers.  What a concept???

Every day I have to spend time explaining points, discount, amortization, buy down, third party fees and this is to folks who already own a home.  How in the heck do you expect those who are just trying to become buyers to know the rules if those who already have gone through the process seem to be so ill prepared to be there to refinance. 

Sad days, when you propose a legitamate solution and refinance option to a client, priced fair and fully disclosued only to be told that someone down the street is offering them a lower rate with no costs.  No they don't know all the details, but their sisters, girlfiends cousin who once temped at an escorw office as a receptionist for three weeks, heard abount it and said it was the hotest deal in finance.

I always wonder how it works out for them, but then they never even come back to gloat. 

Amen! Sometimes when you ask for the pre-qual you'd think you were asking for the sun and the stars. It really is a simple thing and can usually be done over the phone. In fact I'll dial the phone for you and let you use my office to make the phone call.

Besides, it helps us do our job better. Allows us to fully assist the buyer when we know  how much we are dealing with.

I agree with Charita. Some home buyers think we're trying to trick them, or like you say, we're being mean or rude. It's none of those things. It's reality. A seller will dismiss offers without a pre-approval, or at least a pre-qual letter from a bank  or lender. Why bother looking at homes if not ready to put an offer. In this market it most likely will be gone by next week.

Tammy, it is only logical buyers would want to know how much they can afford to purchase a home. Being pre-qualified is the first step to working with a serious buyer.

Great post Tammy!!  In AZ, a buyer cant even make an offer without a pre-qual letter or proof of funds.  Also, the market is heating up out here and buyers need to be ready to make an offer immediately when they see a home they like.  Nice homes that are priced decent are going under contract within the first week on the market if not the first three days with multiple offers.  Get pre-qualified, I am not Mean, I'm Honest!!

In my experience, the buyer who bridles at the thought that they need to be prequalified before looking at homes are not serious buyers.  It is a painless and quick process and absolutely necessary.

Some buyers act offended when you ask if they have visited with a mortgage lender yet..I've heard things like " I could write a check right now for the house we decide to buy!"  If I get the sense the buyers are going to be sensitive about this question, I usually preface it with something like .. Due to the recent mortgage meltdown..options for borrowing have changed and I want to be sure you know the choices available to your particular situation. 

Angry? why?

No one will consider their offer seriously without preapproval or POF( proof of funds) if cash.

Some of my clients are very sensitive about showing the money( bank statements, tax returns, etc.) but this is the way it is- no way around it.