As Realtors we wear many hats, including but not limited to helping buyers prepare for the process of home buying, financially and emotionally. Buying a house is a big deal! That means we pre-qualify them but to what extent do we go?
My Lady (Buyer Story)
I have been working with a highly intelligent but slightly scatter brained Buyer who emailed to me after an exhausting day of home touring: "Thank you for all your hard work and time to show me homes today. I am sorry but I was offended and felt judged by your financial advice today. I don't think Realtors should be giving financial advice but should just show me homes. I know you said your time is valuable but its your job to show me homes that I want to see. Since you're too busy to do that I'll have to look for another Realtor. I appreciate all that you have done for me up to now and will contact you if I decide on one of the many homes you showed me."
I can't say that I was surprised, I had already come to the conclusion during our time together she didn't understand that this is a financial decision and if she's not going to qualify for a home then there's no point in home shopping. I was surprised that an articulate, sharp-minded retired MD would think this way especially since I met her via an 8 hour home buying class that brings in pros includig lenders and real estate agents such as myself.
I had told her that her debt was pretty high when she told me about her finances, and that she will have to have good Debt to Income ratio. I "suggested" (my exact word choice) that she "consider" paying-off the credit card to increase hercredit score and loan amount after she expressed frustration about not liking her choices and if she didn't have the debt likley she'd be qualified to buy more. I further stated that she should take a break until she gets that sorted out. Don't settle for less.
Is this approriate discussion between Realtors and Buyers? Of course! We are not taxi drivers or there for their companionship. It was directly related to helping her find the right home, qualify for it, and afford it. It was a matter of her time and mine, and it was not being well spent.
MYTH - A Realtor's job is to drive a Buyer around showing homes.
FACT - Finding a home is a partnership between the Realtor, Buyer, and Lender. A Realtors job is to qualify the Buyer's needs which is lifestyle, property and financial specific, which includes financial advice as it pertains to a loan. Its best that Buyers drive those neighborhoods if they don't know them to evaluate drive time to work, child care, schools, etc. and to speak with neighbors to dig deep; get the real truth.
MYTH - A Realtors job is the show homes their Buyers want to see.
FACT - Home buying is not a hobby but sometimes is for Buyers. If a Buyer finds a Realtor that shows every home their Buyers inquire about without pre-approval, then that Realtor is not being a good fiduciary and may be creating risk for home sellers and themselves. A Realtors job is to pre-qualify the Buyer to know what range they can afford to buy & are able to buy. In fact, some Listing Agents say in their Agent Remarks, "Only bring pre-approved buyers." This is common in the upper price ranges. Buyers, especially First Timers, often have no idea how inconvenient it is for sellers to show their home and that it creates a feeling of personal violation since their home is personal space. They deserve courtesy. Any buyer not pre-qualified has not provided their legal information which means they could be a rapist, thief, burglar, or just a time sucker.