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Real Estate Shopping Without The Cloak and Dagger

Real Estate Agent with Keller Williams Realty Mountain Partners

     Why do potential buyers try to conceal their financial capabilities from their Realtor?  Why would a potential buyer want to look at houses that can not afford to buy?  Why would a buyer want to look at $200,000 house when he can well afford a $350,000 house?  There is a very slim possibility that he will buy a $200,000 house. 


     A Realtor does not have to be a Realtor very long before they learn that almost everyone buys a home right up to the maximum of their financial capability.  This is as it should be.  If you are a buyer, make your home shopping experience easier for yourself.  Tell your Realtor the truth about how much money you have and how much mortgage you can qualify for.  Your Realtor is not prying into your personal affairs when she asks you to talk to a mortgage company that he is familiar with.  Your Realtor is not prying into your personal affairs when she asks you how much money do you have available for a down payment. 


     Just as your dentist and your eye doctor might ask you what other drugs are you taking, your Realtor needs to know your financial information to serve you better.   If house were free, we would all make our housing decisions based on other things than finances.  House are not free.  The price and the financing terms are the most important consideration for almost all of us. 


     This is why advertisements for houses with no price rarely attract buyers to respond to these unpriced ads.  Picture a buyer that can afford a $100,000 house.  He sees an advertisement for a 7000 square foot house on the beach with a swimming pool in the best neighborhood in town.  This buyer would not respond to that ad.  He would just assume that he can not afford that house.  If that same buyer saw an ad for a nice house in a nice neighborhood for $99,900, he would quickly respond to that advertisement.  Finances are important.  The financial ability of the buyer is as important as the motor is to a car.  Nothing else will work if the car's motor doesn't work.  In a real estate transaction, nothing else matters if the buyer does not have the financial capability to buy. 


     As a  buyer, you would be foolish to think that your Realtor can help you find the home of your dreams without knowing your financial capability.  Some Realtors are more verbally adroit when asking these questions than other Realtors are.  Make it easy for your real estate agent.  Volunteer this information.  Tell your Realtor," We have $50,000 to put down.  We have talked to our bank and they tell us that we can qualify for a $200,000 mortgage.".  What is hard about that?  If you haven't talked to a mortgage officer, you are just guessing.  You spend several weekends looking at $400,000 houses.  Then you discover that you are financially unable to buy a $400,000 house.  What do we do now?  Go look at houses that you can afford.  Wouldn't it have been better for everyone, especially you, if we had done that in the first place?


     Your Realtor has already been down this road.  That is why he insists that you let hin know what you are financially able to do.  That is also why you want to let him know what you are financially able to do.  It makes your job of finding the perfect house easier for you.  Take the clandestine out of your house hunting excursion.  Let your Realtor know your financial capability. 


     If you are looking for a house or have one to sell near Hendersonville, North Carolina, contact me at 828 755 6996 or www.RonClimer.com  or www.lakeadgerforsale.com  

Comments (3)

Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

I always make sure the buyer is preapproved before I start "wasting" my time

Jun 11, 2015 12:21 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Your points are very well taken, but I will tell you that I work frequently with "younger" buyers who are pre-approved for a lot more than they want or need to spend. It becomes a lifestyle choice.

Jun 11, 2015 08:09 AM

Why not have the honesty also extend to mortgage lenders. Preapprovals are easy to come by but loans not nearly as easily - many many times lenders approve buyers who have no chance to acquire a mortgage due to CFP rules designed to save us from ourselves - and then that buyer invests in inspections and earnest money only to have part or all of their income disqualified by a very rigid and stupid formula

Jan 23, 2016 04:07 AM