Can't We Just Go Look At Some Houses?

Real Estate Broker/Owner with Providence Group Realty TREC# 0608931

It is 2015, and the DFW Metroplex is still in a full-on Seller's Market. With less than 2 months of inventory on the ground, Sellers are enjoying multiple offers and the ability to hand pick the strongest, most qualified Buyers in the bunch.

Professional Buyer Agents know that submitting a serious offer means presenting it with an accompanying preapproval letter from their Buyer's chosen lender.

When advised of this, a common Buyer's rebuttal often sounds like this: "We've decided that we want to see houses first and if we like one, then we will be willing to share our personal information with a lender."



While it is understandable that a Buyer would want to minimize the feeling of exposure and reduce the risk of wasted time, starting with the lending step first accomplishes both.

In a market where Buyers are competing for homes, waiting to start the preapproval process AFTER a matching property has been identified can absolutely cause them to lose a property to another quicker and more qualified Buyer.

Lending Approval -- It's Not Just About The Buyer

There's another big issue that Buyers need to understand when it comes to explaining why the lending step needs to come first in the Home Buying Process.

It is a common misunderstanding to think that loan approval is all about the Buyer's financing worthiness.  It isn't. The property they choose must ALSO qualify for the Buyer's selected loan program.

When a Buyer gets pre-approved, they determine what price range they need to buy in to meet their monthly payment budget, how much money they will need to put down, and how much money they will need to cover closing costs. Depending on the program they select, property conditions may also come into play.

FHA, USDA, and VA loans have stricter requirements for property condition than conventional loan programs do, for example. That being said, a Buyer who can only qualify for an FHA loan (for example) should not waste time by looking at properties that won't work with FHA underwriting guidelines. The only way to guard against this error is to get pre-approved first.

Pop-Tart Agents Have Limited Value

Anna Banana Kruchten recently blogged about what the Real Estate industry calls "Pop-Tart" Agents. Buyers who are either not yet fully invested in their purchase process, or who don't really understand the value of getting pre-approved first to protect their time and interests, often agent-hop to meet their need for immediate gratification without any commitment. They look for the overly-eager "greenie" agent who will be willing to "pop out" and show them properties  without asking them to get pre-approved or complete a Buyer Representation Agreement.

Sure... You can get a million other real estate agents out there to take you around to see properties and open doors for you... and you will also suffer the consequences of this kind of "help". There are few worse feelings as a home buyer than successfully finding the ~*perfect*~ property and being powerless to buy it because you haven't done the prep work up front. That is the best way to waste your time. 

Lender Referrals - We Have Them

So, just how painful is the preapproval process, anyway? Providing you have your financial records in good order, getting pre-approved typically takes 10 - 15 minutes. Most lenders offer an online process for completing the application in the comfort of your own home. And, if your records are NOT in good order -- or if you have complicating circumstances that may impact your ability to get financing approval, usually a FREE 10-minute phone counseling session with a competent and professional lender can help you get a working plan and timeline together.

If you are planning to buy real estate in the DFW Metroplex or surrounding counties, give us a call at 469.645.6363. Our Realtors® at Providence Group Realty are Buyer experts who can help connect you with professional lending referrals, and streamline your home-buying process to make the best use of your time and money.

Comments (8)

Cindy Edwards
RE/MAX Checkmate - Johnson City, TN
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677

Very well rounded, good informational post.  I especially like the part about the property being approved as well.

Jan 24, 2015 06:39 AM
Faith LaRosse
Springer Realty Group - Limerick, PA
Serving Berks, Chester & Montgomery Counties

This post is filled with wonderful information for buyers.  I was JUST dealing with this very topic last week!

Jan 24, 2015 06:58 AM
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Amanda, I like the way you incorporated Anna's post to get your points across to readers.  It's difficult for many buyers to understand that someone else must decide how much house they can afford. Great post.

Jan 24, 2015 07:11 AM
Vern Eaton
Askov, MN
Realtor 651-674-7449

I hear that also...I always ask them how they would like to leave theri home just so someone could look around inside without thinking of buying.

Jan 24, 2015 07:41 AM
Randy Teakell

Amanda- I love the word pictures. Powerful truths in each of them. I cant tell you how many folks I work with to get qualified that were not ready initially. Some even impede their own progress by misguided actions. Thank you for sharing.

Jan 24, 2015 08:35 AM
Janis Borgueta
Key Properties of the Hudson Valley - Newburgh, NY
LIC RE Salesperson

Love the title and the answer is NO

Jan 24, 2015 09:23 AM
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Amanda - You can always tell when you have a serious buyer (ready, willing, and able), because they already have a lender approval before contacting you.

Jan 24, 2015 01:09 PM
Michael Dagner
Brokers Guild Classic - Denver, CO
Your Denver Homes Realty Expert

Amanda, if buyers understand what terrible service they're going to get from agents who waste time showing houses to unqualified buyers, and then have nothing left to give when a bona fide buyer appears, they wouldn't ask anymore.

Jan 25, 2015 07:10 AM

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