Home Buyers, Please Don't be Offended... Just get Pre-Qualified.
Save Yourself Some Time. It Really Is For Your Own Good.
I've "lost" more showings due to one particular reason, more than any other. In fact, 90% of the time if I "lose" a showing, it's due to this reason. A buyer does not want to get pre-qualified.
I live and work in an area that is abundant with folks that are:
- hard working,
- resilient,
- bill-paying,
- been doing business with the local bank all their life,
- never been turned down for a loan,
- got good credit,
- family been here forever, may even own half the town...
.....kind of people.
I know these things.
When they call about looking at a home, they'll tell me these things.
I know, I come from a family that was the same way.
The salt of the earth, that's what my area has.
I love Southeast Oklahoma and I wouldn't want to live anywhere else.
BUT things have changed over the years. Some of those changes have come about more recently,
- like since you bought your home about 15 years ago..
- or that last 40 acres you added onto the place 4 years ago.
- They've even changed since you helped your daughter and new son-in-law buy their place 18 months ago.
- Or if you have never bought a home...it doesn't matter that grandpa's got money in the bank unless grandpa is going to co-sign your loan, or give you some of his money. His good credit does is not an inherited asset that he will pass to you.
SO PLEASE DON'T BE OFFENDED when I say to you,
"There's one thing that the seller has requested I get before I show you the house. I need a copy of your pre-qualification letter from a lender".
Like I said, don't get offended. Nothing personal. I have to say that to you, make that request, or I wouldn't be doing my job.
- I want to show you the house. I love showing houses. I love my job. I love helping folks buy a home.
- You want to see the house (or at least you say you do). You say you are seriously shopping for a home. You say you are going to buy one.
So why do you not want to get a pre-qualification letter? Do you believe that I doubt that you can borrow the money? Is that the way you're going to take it, as an insult?
THAT'S NOT IT.
If you've turned the tv on to a news broadcast during the last year or picked up a newspaper and read more than the headlines... well even reading the headlines might do the trick...
you should have figured out that the lending situation, including credit score requirements, down payment requirements, assets to close, etc etc have all gotten more difficult than it used to be.
Even your local bank where a hand shake got the deal done will take a lot more than that now. The documentation that your loan officer is going to ask you for, quite frankly is proably going to surprise you.
Now you ask me, "How is getting a pre-qualification letter going to save me time?" and "Why do you, the real estate agent, or the sellers want me get one?"
First question - How will it save you time?
- If you're serious about buying, you're going to have to get a loan. Getting a pre-qual letter from a reputable lender... a lender that you WOULD borrow money from.. is the first step in that process. (I'll even give you contact information for several lenders.)
The lender will check to see if you're credit worthy. When you find a home that you want, most financing supplementals to contracts default to a 10 day period to get pre-approval on your loan. Of course all things in a contract are negotiable but the seller is probably not going to want to allow much more time than that when/if they accept your offer. That 10 days can go by fast and you're going to have a lot on your mind at that time, like inspections, appraisals, moving... " If you're serious about buying a home, then act like it and get a pre-qual letter. Get the ball rolling for a loan pre-approval. It's just a matter of tending to your business.
- Second Question - Why do I and the seller want you to do it? See the the paragraph above... If you're serious about buying a home... why would I want to take my time to show you homes if you're not serious? There are only so many hours in the day and we're all limited, please don't waste mine. I'll go out of my way to help you with your transaction.. to the nth degree.. if you're serious about purchasing. BUT you gotta' do your part...get the pre-qual letter. The seller wants you to because they are going to make sure that the home is ready for you to look at and are going to have you, a stranger, in amongst their stuff. Getting pre-qualed tells them that you are a serious buyer and not just a lookey-loo wanting to see how they live or because you're curious and you've always wanted to see the inside of that house. A buyer with a pre-qual letter is probably going to get their offer looked at in a better light. :)
Now you tell me, doesn't it make sense to get at least a pre-qualification letter before you start looking at homes?
Pre-qualification letters are the best way to get scheduled to see the homes that you want to see and in a timely manner. They are an excellent boost to getting your offer taken seriously when you do find the perfect home, investment property, or land. They probably will help you get a seller to take an offer more seriously.
Got that pre-qual letter? Want to look at that house today? Call me... I'll be more than happy to show it to you.
Some photos courtesy of Morguefile.
This blog post was originally posted at Integrity Real Estate Services Blog.
Looking for a home for sale in Idabel, Oklahoma? Let me Google that for you.
Judi Barrett, B.S. Edu.,
Broker, Integrity Real Estate Services, Office Address: RR 5 BOX 126, IDABEL, OK 74745 580-212-5946
Our Name Says It All.
Real Estate Services You Can Trust.
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Judi, A great Post! Salt of the Earth folks just don't like this change, but You and I know they will help themselves by taking care of it! Good for You! Suggesting this one for sure!
John,
Thanks.
Are Arkansas and Oklahoma folks wonderful!
It has been a hard transition for some folks that have always been able to call the bank and tell them what they wrote a check for and then go do the paperwork. :)
Hi Judy, great post and wanted to re-blog, but can't! Pre-qualification is great to have...I've been after my buyers to take this action and I am waiting for the letter before writing a contract on a particular home they want to buy. The sellers have already turned down two offers that I know of on the home they want to buy. ......SHOW ME THE LETTER!!!
Judy, the great thing about this is, it doesn't just apply to southeast Oklahoma. It applies everywhere, to all buyers.
I would reblog, but drat, not rebloggable. Oh well. Maybe I can do half as good a job of laying out the reasons why a buyer should get a pre-qualification, or better yet, a pre-approval...
Good morning Judi,
Yep! If your a serious buyer you need to see a lender BEFORE looking at homes. We are not asking to "Show me the money..just that you show me you can get the money!"
Rebecca,
OOPS.. Just went back and edited to make it rebloggable.
Thank you for the kind comments.
William,
It has been edited to allow re-blogs..
Sometimes after I finally get one ready to post, don't get all the check marks in place.
Thank you for reading.
Hope you can make use of it,.
Dorie,
That's it..
I really want to stress that in my area.
It's not that I doubt someone can borrow the money, but things have changed.
You put a lot of work in this. And, the message is very well put. It is about time we ALL work together and say the same thing. No looky-loos. Thanks.
Judi, great post, things always change and some things have just changed back to what they were...you are right...don't get offended...get it done.
Judy, you say this so smoothly. I will not show properties to anyone who has not at least spoken to a loan officer.
I have people tell me all the time that they're certain they can get a loan because 1. they have a job and 2. they have a little money for a down payment. If only it were that simple!!! The consumers truly have no idea what the process of getting a loan is like these days, and it's difficult getting them to see the light.
Repeat buyer can sometimes be the most difficult. They still have in their mind the when some Fannie/Freddie approval didn't even require a pay stub, W-2, or a tax return, just a verbal verification of employment. Asking them for all 4 now seems outrageous to some of them.
Many first time home buyers have nothing to set expectations against.
Amen sista! I think I offended some folks this week that just dropped into town and wanted to see a few homes. I asked if the had a house to sell...they did. It wasn't listed. Then I asked if they needed to sell that one to buy the next one. They hadn't talked to a lender to see what they might be able to do. I gave them info to contact one so we could figure out what they could buy. They haven't called me back. Maybe they're mad at me? LOL
Judi, asking for a prequal letter is standard here in my area. We don't go looking at anything if someone isn't prequalified. Haven't run into anyone who was offended when asked.
Suzanne,
Thank you.
I wanted to find a way to say some things that hopefully will encourage buyers to get a head start on their processes. I want to help.
Yvette,
If buyess will do their part, it makes it so much easier to me to move things along for them to see the homes they want to see.
Frank,
Thank you for your kinds words. How are things in NO, my friend?
Shannon,
That's what I'm talking about.. one buyer had their VA cert and thought that took care of it... but not so.
Judi: Hard to believe that people would even consider looking at homes without being pre-qualified. I won't waste my time or for that matter theirs.
Rodney,
Things have changed haven't they?
I find second time around clients to often not be aware of the changes.
Lizette,
Maybe it's just the timing and they'll call you back.
You did the right thing.
Bob,
Sometimes that's what happens when you offend people, you don't run into them... (they don't call back). :) LOL.
It's a good rule to have.
Jane,
It is hard to believe isn't it?
This is SO comprehensive! I flat out refuse to show if they flat out refuse to get approved or send me proof. There is no need to waste anyone's time and you explained it in a VERY thorough and eloquent manner here!
Judi, you've done a great job of letting buyers know WHY being pre-approved/pre-qualified is so important,and how it benefits them. Nice post, indeed. "suggesting."
Hi, Judi, great post! I suggested it for feature. If I was a buyer, I would not think your advice is offensive at all, if they are serious. A serious buyer will do what they are supposed to do and won't take any advice offensive. I am going to re-blog it also, it applies to our buyers badly here, :)
I am amazed at the resistance buyers have to taking this step. They still don't realize how difficult getting a loan is even for the most qualified. And I absolutely won't do anything any more until I am assured that they are going to able to close on a property. There is no purpose whatsoever in looking without the pre approval. It is not just my time wasted, it is theirs.
Renee,
Thank you. I'm thinking of sending this out in a newsletter to all of my buyer contacts..
Lottie,
Thank you.
The whys should be evident but we all know a lot of emotion gets tied up in shopping and buying a home. . .
Rita,
Thank you.
Hopefully buyers will read.
It can make it so much easier for them and after all, that's our job.
Jane,
It makes you wonder doesn't it when they resist, if they are serious.
There are too many things to do these days to waste time if someone is not serious enough to get at least pre-qualed.
Judi this is great advice, and it only takes a few minutes of a Borrowers time. Those few minutes can eliminate hours of work,frustration and disappointment later on.
I see so many Buyers who believe they should look at houses way above what the qualify for. They enter my open houses all the time. "Do you think they'll come down to?" is a great catch phrase!![]()
Judi, Excellent post and explanation from the listing agent and sellers perspective. Like many of us I am amazed anyone would ever consider looking at homes with being prequaled. What if they find the "perfect" house, but they cannot put in an offer because they haven't even talked to a lender. Of course, then they, or their buyer's agent, will call me (or any loan officer) and expect us to stand on our head, without verification of documentation, to get them prequaled immediately.
And, if I do, they will then that the next steps of shopping me against every internet lender they can find. Grrrr.... Much prefer people who are respectful of everyone's time.
Two reasons that I always give to my clients who wonder why they should get a preapproval:
•1. We need to know what you can afford. If you look at, and fall I love with, a house that you cannot afford you will use it as a measuring stick to gauge all the houses that you can afford. None of them will measure up.
•2. Sellers will not take you seriously if you are not preapproved.
Reason #3 is that I will not take them seriously, either.
Judi, really good post. It is amazing how many people fight getting qualified ahead of time.
You mentioned a client that had a VA certification and thought that was enough...that's one of the pitfalls of the process, at least from where I sit. Just about the time you start to feel like you're repeating the same information over and over, you get the one client who really needs that reminder for the one detail they can't seem to remember. There really is a lot for a first-time home buyer to absorb. Human nature being what it is, it's not really surprising, but it's easy to start second-guessing after a while. "Am I nagging this client?" No, probably not--at least where the essentials are concerned.
Hi Judi:
Good post and great info for potential buyers. I think all agents get people who get offended or just don't understand why we need this. I try to tell them that besides saving them time and needed it in order to make an offer, it is a safety issue for the sellers. I remind them that they would appreciate it if any agent bringing someone into there home had made sure the person was willing and able to buy first. Most people understand that. The ones that still don't want to give me prequalification info end up calling someone else and I'm fine with that. If most agents start requiring this, it will become the norm and we won't have such a tough time making potential buyers understand and expect this.
Judi, good post. I would only add to that: And your prequal has to be done by my lender, or at least a lender I know and trust. Because I've seen some shady stuff come across my fax number. Anyone ever called a lender on a prequal and heard them say they have no idea who that buyer is?
Well put, Judi! I always tell prospective buyers that the listing agent may not even present their offer IF they do not have a pre-APPROVAL letter. So, if they find their dream home, they need to be ready with the preapproval letter. Those that make a fuss about getting in touch with a lender may just be wasting their time (and your, too.)
Hi Judi - good post, and you are right about having clients get pre-qualified before looking at properties.
I think so many people think they pick out the home first, before they figure out if they can pay for it.
So true.
Maybe it is ok if you waste my time but is it ok to waste the sellers's time and expectations?
Judi,
I agree. It is so important for the buyer to get pre-qualified so that the seller knows that you're serious ....
Lori Cofer
Amen, Amen, AMEN!...why waste time on anyone if they are not willing to provide proof of ability to purchase! Nice work Judi!
I have been doing this as a new(er) agent since day one and already it has saved me a lot of wasted time and agony. More importantly though, it saves the client the time and agony. It gives he or she, or both if the client is a couple, the opportunity to know in advance what they can or can not do and adjust their plans accordingly. In fact "have you had the chance to speek with a lender yet?" is the very first question I ask! The second step then is filling out a buyers rep. agreement. Both of those important steps can save one a tremendous amount of time and energy.
Judi,
Great post! I agree totally. Scott # 47, I agree prequalification saves time and energy for everyone invloved.
Absolutely spot on, Judi! You have really nailed all of the finer points why it is absolutely critical for a buyer in todays real estate market to obtain a pre-qualification letter prior to looking at homes! Congrats on this VERY well deserved feature!
Judi,
Arizona Real Estate Commissioner's rules require the buyer to come in with a Loan Status Report (prequal) before an offer can be made. Makes it easier on the Agent asking the buyer to get prequal'd.
Mike in tucson
Very well-written and thorough explanation, Judi. A serious buyer can save so much of their time and ours by just spending a few minutes up front.
I do it all the time. I wom't waste my time unless they are pre-qualified AND locked in at a rate.
I try not to take any buyers out to see homes until they have a pre approval letter. Great post, Judi!!!
You think it tough getting 'em pre-qualified. How about getting them to sign buyer's agency. I let them sign that before I open the door or I leave without showing. Too many buyers don't disclose that they already have an agent.
Good blog on the importance or pre-qual.
Great reminder for our clients, Judi. I have re-blogged.
It does not make sense to put a person in the car to show property if they have not been pre-qualified.
Well done Judi!! Wonderfully written and to the point.
Beautiful post. Just one addition that has been beneficial over the years and has gotten me cash buyers that other agents did not question. Don't forget to ask: "Are you able to purchase without a loan?"
Margaret
Judi....Great post and really on point. Buyers have to take an active role in the purchasing process and it starts with the pre-qualification letter!
Thanks for the post. The industry HAS changed as has the world. Way too many sellers have gotten down to the final stages of the transaction only to find that good, well intending people do not meet the new credit worthiness standards and are left holding the bag. They have lost other buyers because they were "in a transaction". They have lost valuable time - the stress amplified if the sellers are relocating due to transfer, family situations, health or finances. Getting the lender's commitment to lend the buyer money needs to pave the way for the transaction... not happen as an afterthought or a necessary "evil" obligatory during the pending transaction.
Besides, lenders are taking longer to fund because of regulations and appraisal times. There is really no good reason not to get the preliminaries out of the way... "if you are serious about buying".
It's so important for everyone involved in the transaction! Great post, Judi.
Thanks for a great and entertaining post! Time is taken by granted by too many and this just makes it that much easier for everyone involved! Thanks again, Vicky
Oh my, we have a hard enough time here on Long Island getting buyers to sign agency disclosures. We do agree though that we don't want to waste our time with un-qualified buyers and when we ask if they are pre-qualified and they say no but want to see properties first, we just say....Pass!
Larry & Sheila
Judi, I know this wastes alot of time for many real estate agents, but in my experience, the buyers we work with are well able to purchase and requiring a pre-qualification up front just isn't necessary. That may change in the future, but for not it hasn't been a problem.
Hi Judi, This is one of my pet peeves with Buyers, and probably the thing that started the "Buyers are Liars" thoughts. I get so tired of a "would-be" buyer saying "I have no problem with money".; then after an extensive effort with and for them I find out that the Mortgage Company says "Sorry Charlie"! Thanks for the good post! We get too soon old, and too late smart!
You can't buy a house without being pre-qualified, and it's unlikely that your offer will be accepted without it. So, why not just get it done?
Judi, I was searching for a blog on AR just now about getting buyers pre-qualified....because it is so difficult here in GA too!! They just don't want to hear it, and they don't want to do it. they just want to see some homes to get a "feel" for what's out there. Well, I have had ENOUGH!! I will no longer entertain anyone's fantasy of home ownership unless they have something to back it up...
I just needed some motivation, and thanks to your post and all of the great comments, I now have it!
Thanks :)
Judi, wish I got here sooner to suggest...congrats on the feature. You're quite right when you say things have change. Sometimes it seems as if lender requirements and financing options change daily. In my area it's standard to submit a pre-approval/pre-qualification letter with an offer. Usually, much higher end properties require them to show properties. I wish all buyers could read this.