Have You Spoken With a Lender Yet? It's Not a Trick Question.

By
Real Estate Agent with Keller Williams Realty

Have You Spoken With a Lender Yet?  It's Not a Trick Question.

Preapproval LetterIt seems that nothings turns off a prospective home buyer faster than being asked the questions:  Have you spoken with a lender yet?

For some reason, home buyers become defensive when asked this question which seems a bit odd since they are in the market for a home, you'd think that they would want to know how much a lender would loan them for a purchase.

It's very common for real estate agents to get the cold shoulder after asking this question of a buyer.  It's not a matter of trust (although we don't know them enough to trust them), but it's merely a matter of having one's financials in order so that when presenting an offer, the buyers presents from a position of strength.

Of course as a buyer's agent, it's our responsibility to look out for the best interest of our clients and be upfront with our customers as well.  However, calling a listing agent to schedule a showing, lying about a buyer being pre-qualified or pre-approved when asked "is the buyer is pre-approved......" well that's not really apart of what we do. When I let the listing agent know that we don't have a preapproval yet, s/he has every right to insist that only qualified or pre-qualified buyers be shown the home.

Not only that, but as a buyer's agent, knowing what you are pre-qualified to purchase only helps me to help you find the best possible home for our money.  While conducting the home search, that precious tidbit of  information helps me to help you stay within budget.  You see, we may find a fixer upper for you, but based on the amount of your pre-approval/or pre-qualification, I'll need to estimate whether your loan has room in it for repairs.

I could go on and on about the famed pre-approval letter, but we'll go over all of that once we have our buyer consultation.  Once we have our consultation, you'll be given a complete packaage containing all of the information you'll need to make your home search a success with the least amount of hassle.

Now, about that preapproval letter.

 

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Ambassador
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Anna Banana Kruchten CRB, CRS 602-380-4886
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana!

Charita buyers must absolutley be pre-approved BEFORE any agent takes them out looking at homes.  It is one of the beginning steps - period.  Great post!

 

Feb 04, 2013 12:35 AM #1
Rainmaker
1,185,329
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Charita:  Welcome to my world!  For many reasons, this attitude seems to crop-up alot when talking about being-approved or any step towards financing.  I think there are many things that contribute to this ... actual finances being only one of them.  The overall perception of working with a Lender is not positive right now.  I see my clients relax and begin to trust as we get further into the transaction ... and as they come to know me.   I try to change the perception one client at a time ... it's all you and I can do.  And about that pre-approval and pre-approval letter?  It's as good as the Lender it comes from ...

Great post ... and one that I, as a Lender, appreciate you writing about ...

Gene 

Feb 04, 2013 12:37 AM #2
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Charita Cadenhead
Keller Williams Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

I agree Anna.  I may take them out once if the first contact is made on the weekend.  But beyond that, we definitely need that pre-approval letter.

Thanks Gene and I abolutely agree about the strength of the approval letter.   All approval letters are not created equal. But that leads us to another subject as well:  agents referring buyers to lenders for whom they have worked with before and trust to be upfront and either get the job done, or let the buyer know upfront that they can't help them.

Feb 04, 2013 12:43 AM #3
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Dagny Eason
Dagny's Real Estate - Wilton, CT
Fairfield County CT, CDPE Homes For Sale and Condo

Charita - AMEN!    Why is the aversion to pre approvals?  I think they think that then they are getting deeply committed to you and your program, and they may not be ready to commit.    They think you will learn their finances.....   I leave that between the lenders and the buyers - my business is whether they qualify.  That's it.   

Feb 04, 2013 01:08 AM #4
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Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

If buyers want to just look at houses without being pre-approved, they should seek out open houses on Sundays.  Becoming upset at the thought of getting pre-approved would raise red flags for me.

Feb 04, 2013 01:16 AM #5
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Charita Cadenhead
Keller Williams Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

That's one possibility Dagny.  I just really want them to know that getting pre-approval is all a part of the home buying process.  As a matter of fact, it's the MOST IMPORTANT part of the home buying process.

Margaret when tempers flare because we've asked for a pre-approval, that's a definite caution sign.

Feb 04, 2013 01:31 AM #6
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John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Why buyers go on the defensive when asked this question is always puzzling to me as well.  Maybe it's not what we ask but how we ask it.  We could say something like in order to give you the very best negotiating power we need to be sure you are pre-qualified or better yet pre-approved, have you had opportunity to discuss buying power with a lender yet? We need to help them see the value of it all.

Feb 04, 2013 02:01 AM #7
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Charita Cadenhead
Keller Williams Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Totally agree John.  A personal touch can go a long way.

Feb 04, 2013 02:05 AM #8
Rainmaker
1,185,329
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Charita:  I adore you ... you get it!  A realtor that actively helps their clients by referring quality professional mortgage lenders does them a HUGE favor ... and themselves too.  You prove once again why you are so very successful and admired ...

Gene

Feb 04, 2013 10:17 AM #9
Rainmaker
2,964,904
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Charita, I do a rigorous screening if this question scares the buyer away they are not buyers they are lookers. I am willing to set them up on search programs until their approval is completed...but I will not spend too much time on them. Not wanting to sound conceited, just my time,  my wear and tear, my cost are important to  help those who are ready to buy now....

Feb 04, 2013 10:56 AM #10
Rainmaker
1,557,241
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

I don't know why Buyers think we're ask this question.  It's certainly one of the most important first steps in the entire home buying process.  Great way to put it, "It's not a trick question"  ;-)

Feb 04, 2013 11:45 AM #11
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Charita, Even a preapproval letter is not a guarantee but at least it helps let us know a lender has taken a close look at the financials of the buyer.

Feb 04, 2013 12:19 PM #12
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Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Charita getting pre-approval or qualified is a step that should be in place before the home showing. Knowing what a buyer can afford will help you make home selection within the financial criteria provided by the financial institution.

Feb 04, 2013 01:36 PM #13
Rainmaker
4,319,053
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

This is the first question I ask buyers. I am sure some of them do not like it.

Feb 05, 2013 03:07 AM #14
Rainmaker
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Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Charita, in a fast paced real estate market, if buyers do not have a pre-approval, they will not be considered if they are up against any other buyers.    You have to look like a strong buyer.  

Feb 06, 2013 09:51 PM #15
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Charita Cadenhead

Serving Jefferson and Shelby Counties (Alabama)
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