Financially Pre-Qualifying Buyers

Being a professional REALTOR®, I take pride in my work, and that includes doing a complete job in protecting my clients, whether they be Buyers or Sellers.  One part of the job that I find is missed by many REALTORS® is the act of determining the financial qualification of Buyers.  While I understand that there is a certain amount of trust that we must have in our clients, it is very beneficial to see a pre-qualifying letter from the Purchasers financial institution before looking at houses and, at the least, before writing an offer.  The benefits to this step in the house-buying process is that it:

- Sets Limitations: Both in the amount available to spend, AND what your Buyers will get for their money.  Many buyers, especially first-time buyers, do not have a realistic picture of how much they can afford to spend, and many that DO actually know their limit are not aware of "how much house" they will get with their funds. It's our job to bring a certain amount of realism into their search, an act which will benefit everyone involved in the transaction.

- Saves Time: By prequalifying Buyers, we can help buyers eliminate some homes early on, so buyers don't have to spend so much time looking, which also benefits us, the salesperson.  By spending time looking for/at homes that are completely out of reach for our clients, we lose precious hours that could be spent with family or other clients, not to mention the cost of a couple of tanks of fuel. 

- Avoids Frustration: Prequalification can eliminate the frustration buyers feel when they find the perfect house and get an accepted offer, only to discover that they can't afford it. Also, we must keep in mind that there are normally two parties to a transaction, and you can count on the fact that the Sellers agent will bear the brunt of their own clients' disappointment. 

- Develops Trust:  While many people do not want to divulge their financial information; if the reasons for asking for this very personal information is explained properly, the client will come to understand that we are only trying to do the best job possible, and that means understanding their limitations.  Once the clients understand that we are worthy of their trust, they become more open with us, making our jobs easier.

Even if you don't think you owe it to your clients to know their limitations before starting a search, I truly believe that we owe it to ourselves to determine this buying factor before starting a search.  This simple disclosure will guarantee that our efforts to find our clients a home will not be in vain.