Real Estate in Kansas City North

I'd say No -- NEXT!

Hi Fran,

It is very simple to explain to the client that if they are not pre-qualified then how do we know what price range we should really be looking in?

Michael A. Caruso

I would not show a home to someone who isn't pre-approved.  Its a waste of time unless of course, they have cash.  Then I ask for a bank confirmation.  ;)

After asking if they are working with a Realtor, the very next thing is "are you pre approved"? A family friend or associate, maybe, but I always tell them, as soon as you have your letter faxed to me, we will start looking. However, I have been working with a couple who had trouble getting their letter, but they knew it was coming. We looked at homes and of course they found one they wanted and I told them they needed that letter for me to put in an offer.This tends to eliminate some of the people who just want to see the insides of a house for decorating purposes!   Otherwise, I do not understand why someone would want to look if they don't even know how they will pay for it!!! Or what they can afford!

This is a good point to bring up, I had heard that a few years ago some home decorator on TV was telling people to call Realtors to go see homes to get decorating ideas.  Im sorry but how rude of someone if they are not in the market and are willing to waste your time.

I usually try and explain to the client I would hate to show them a house and have them fall in love with it only to find out they are not qualified to purchase, and how  I would hate to see them disappointed.  It seems to be the only way to politely tell them to go talk to a lender...

I have . But the person has been e mailing and working with me as there credit score grows. I know that she is dead serious about buying a home. And she will use me. I have showed her a few homes just because they where close and she wanted to see what you get at this price. I have received refferials from her and become a close friend. You have to give and take. But if this guy just refuses to lend you any explanation of his story say next..

There's something we are all forgetting. We can charge them a fee. Give him an alternative. He can pay for your time. If he wants a sight-seeing guide he can pay for one. $50 per property sounds fair to me.

Nannette: Absolutely, hence the picture of the rear view mirror. :)  Seriously, I am a firm believer in everyone needs a home and should be entitled to get one........ but let's follow the process.

Michael: That's it right there...... if they aren't pre-qualified how do they know they can afford it?

Kay: Cash is good, but not likely in this price range.. but cash is good!

Karen: There are exceptions and you know those and feel those.... I didn't feel this one.

Chris: Decorating ideas?  Buy a magazine!

Darci: Good explanation! I like it !!

Sharon: There are situations where one can ..... but there has to be evidence of possibility!

Thanks to all of you for stopping by and giving me your input!  I appreciate it!

Karen: UNIQUE idea.......... and how do you present that in conversation?

Fran, I would show them one property if it were my listing. This would give me the opportunity to speak with them face to face about getting them qualified. But it would have to be at my convenience. Sometimes we have to meet with folks in order to get the whole sccop.

I don't show a property unless I meet someone face to face first, in a safe place. That is basic safety. And if a person is willing to accept that common sense, they are usually able to accept the common sense of getting their financing in order. It takes very little time to get them a pre-qualification. And then, you know how committed they are by how long it takes them to get qualififed :)

Fran,

In my market here on Drummond Island, Mi. it is unheard of to ask for a Pre-Qual.  However since taking my ABR class last year I learned to do so.  Well I did ask when my biggest competitor on the island asked to show my listings.  I told her and she got very indignant.  

Too Bad!, it is my clients request, not mine.  In the future though I intend informing all my clients that I do not want to show their properties with out a Pre-Q.   AND it is an inconvenience for my sellers to vacate their homes just for shoppers of decorating ideas or someone wanting to fill in a couple hours while on vacation. 

I am just starting out, my time is extremely valuable doing all the things a personal assistant would otherwise do.  There needs to be about 48 hours in a day for me.

AND, to Kay's suggestion, money for a showing would be very nice! 

I would meet with them - talk about the process - but we are looking at homes until they are Pre-Approved.

I am also confused about several comments talking about "Pre-Qual".  No offence - but my dog can "Pre-Qual" someone!  A Pre-Qual means nothing in my world.

Pre-Approval is a must.

  

As a rule, usually not. But there are always exceptions to every rule. Pre-approval is so key to establishing the basis of what we will be looking for. It drives the whole process. But there are times when simply going out to get a sense of the area can be time well spent, and also time becoming better acquainted with the clients and their likes/dislikes.

NEXT ..... If they aren't willing to get pre-approved they aren't worth your time.

Sean Allen

OH OH OH ...... I forgot to comment. Is that you putting on makeup in the rearview mirror?

Sean Allen

It is wasting your time but, maybe the parents are going to gift money that might make a difference.  Loan approval makes a seller feel a buyer is serious...so get serious and get the approval.  Nice post Fran.

If they are not pre-approved, or at least pre-qualified then I can't spend time showing them anything.  When they get irritated with that personal rule, I explain to them that it is for their benefit.  I don't want to show them homes that they fall in love with only to be disappointed when/if they can't afford it or can't qualify.  I also make it known that once they have done their part with the financing that I will be happy to devote myself to finding them the home of their dreams with terms to match.  Usually ends the squabble right there.

I would not show a home to someone that has not given me the information to get them approved.  It is not worth your time.  You want the person to have some commitment.

 I would get them set up with tools to shop online,I don't know if I would flat say I'm not showing you homes unless your preapproved because even though it makes sense to you, It may make it sound like you don't want to waste your time with them unless your getting paid and some people may take this as a used car salesman type attitude. They may buy but won't work with you because they think your intent is only to treat them like a paycheck. I build my business on relationships and everyone is different.

Team Quintana Real Estate - Spokane Home Finding Expert

visit www.TeamQuintana.com if you would like to exchange links with me Fran

DUE to the death and murder of a recent collegue in Vancouver bc. One can never be too safe.( I am in Washington where there have been a few reports of a suspect luring agents to vacant home here too) An agent was murdered here 1-2 years back and left in a vacant home.

Any serious buyer will understand qualifying them or checking them out.  Legitimate buyer that is. 

I think once the public knows that qualifying them is a safety net, most are willing .

I do work with agents who do FLOOR time that will go to meet people that call in for in inpromptu showing.. they feel that a potential buyer, deserves one "freebie" showing... Some in the industry are getting away from that for safety purposes. I am one of them.

Hi Fran - I always ask that question, and usually won't unless I get a good sense from the conversation that they're legitimate and likely well-qualified.  And then I ony show one, maybe two, and continue building rapport.

Ann

I am a mortgage broker and I find myself in similar situations, where a borrower will call and request a rate quote and good faith estimate with little or no information. It is absoultely amazing that a major, 30 year investment,is taken so light heartedly.

Yes I probably would go see one house and get a chance to speak to them in the car.  Not all buyers understand all the pieces of the puzzle, sometimes an explaination as to the why's are necessary.  I could then judge the next step.

First of all, I don't own a cab company....I'm sure you don't either.  As far as getting pre-qualified/ pre-approved, in NC, the laws changed DRASTICALLY in Nov. of 07. 

Several things come to mind:

1.  Mr./Ms Prospect- if you are not qualified by a lender, and I take you out to see home in the 500K range, and you qualify for a 250K home, then you are not going to LIKE any of the 250K homes, because you've already seen the 500K homes.

2nd. If you are pre-qualified/ pre-approved, then whatever offer you tender will have  a much STRONGER degree of consideration, as another offer that may come that is not pre-qual'd, isn't as strong...

3rd. If you decide not to get pre-qual'd/pre-approved and make an offer and CANNOT close the deal, then you may lose your earnest money.

4th. If you want me to work for you, then work with me. Your choice. If none of these terms are acceptable, then may I refer you to someone in an opposing company (J/K!)

We run into people everyday that want something for nothing....As my daddy would say," wish in one hand...."

It's a Red flag if they refuse to get one. I would give them the number of a local lender and have them meet with the lender ASAP. I won't say I haven't shown property to buyers that haven't been pre approved. We are in a resort area, and sometimes people get the itch to buy and didn't plan on it. I don't want to miss them.

Yes, I would show them the house.  I think this could potential be a client, after I meet with them I can gather info to guide them in the right direction.

Never meet someone you don't know at a vacant property if no one else has seen them.  I carry pepper spray with me, since most of the houses I show up here on the mountain are vacant.  I won't meet someone without meeting them in the office first.

Once that's established, the first one is a freebie, if I have the time.  If they haven't spoken to a lender or are receptive to speaking to one, I won't show another property unless I have that lender contact or letter in my hand.  Just not worth the waste in time.

No, but an agent of mine would.  One of them makes quite a bit of money for her and me by doing things the wrong way.

There are plenty of folks who will jump at the sound of their phone ringing and run to show a house.  I'm not one of them.  For two reasons safety AND professionalism.

Nope, I wouldn't show it.

a) it's a waste of my time to take buyers around who aren't prequalified;

b) it's not fair to the seller to show the home to unqualified buyers. 

Times have changed...none of us Buyers Sellers or Agents can afford to be spinning our wheels.

If they refuse to do it..they aren't serious!

I'll apologize now.  This is going to be a "Rant". Barring the security issues which are unknown unless you have a face-to-face (preferably in your office) there is no reason to assume that this potential client won't get an approval, just that he does not have one now and wants to see a house.  It doesn't take a rocket scientist to find out what he can afford and whether the house he wants to see is within that price range.

What's wrong with taking 10 minutes and pre-qualify them yourself?  A few financial questions - monthly income minus what their outstanding monthly debt payments (credit cards, car payments, child support, etc).  Income minus debt = Available Net.  Now take 35 - 45% of that figure and you have a good idea what the bank will allow (barring any judgments and such).  There are also websites that figure it for you - i.e. www.mortgage.com, click on mortgage calculators then to "How much House Can I Afford?"  It does the work for you.  Or better yet, get out that Financial calculator you got in Real estate school and total your PITI limit and figure backwards.  Show them a house in that price range and assist them in finding a mortgage banker. 

Don't be so quick to give up on them.  Meet them in your office for a consult before the showing.  With the housing market the way it is in many areas, I don't think there is anyone that is soooo busy that they couldn't find an hour out of a week to do a little extra to help or at least clarify something for a potential client.  Show them the house and set up an appointment for him at the bank and let him know you will talk more once he has his approval letter.  Just make sure you have him under contract before he leaves.

I don't want to sound bitchy, but, OMG, I seem to hear alot of people willing to walk away from so much business for so little problem lately.

Fran, I would have to disagree with Rita.  Realtors need to be Realtors, and Loan Officer be Loan Officers.  Unless a Realtor is able to pull someones Credit Report, they CANNOT know what someone qualifies for.  Just asking about income and debt does not get it done.  They could make $200,000 a year and have just a couple of thousand dollars in monthly debt, and have Credit Scores that are in the 400's.  Or they could have had a foreclosure within the last two years.  There are a number of things that a Credit Report will show up that a Buyer will not tell you.

The position you took with the Buyer was absolutely the right one in my book. 

I'd probably show them one after asking them a few questions. Good point Rita.

I'll show one or two houses without a pre-approval but this is only so I can meet the client face to face, see if I want to work with them and get a buyer/broker agreement signed.  I won't take someone out a second time with out being prequalified by a lender.

I can certainly understand the idea of working with a buyer who's pre-qualified and not wasting your time, but how much business are you losing by doing that?

Some buyers are 12 months away from buying and at this point, they're just not ready to get pre-qualified.  A savvy buyer knows what they can afford.  Some of these people want to get familiar with neighborhoods and developments.  Some want to see what types of homes different areas offer.  Maybe now they're not serious, but it's on their mind and you need to nurture them until they're ready to move forward with the purchase and when they are ready, they will use you for their purchase, because you were there along the way.

I have buyers who contacted me in June and we're now 4 weeks away from settlement on a $500K property.  We've seen about 15 properties and they never got pre-approved.  They got pre-approved 1 day before we put an offer together.  After talking to them, I got a pretty good idea of what they could and could not qualify for.  If I asked them to get pre-approved back in June, I know they wouldn't use me as their agent.  They would contact another agent in the area who would show the house they found online.

I would never turn away someone, just because they're not ready to get pre-approved.  The business is so tough these days, so why not just work a little harder and smarter.  Most of my business is from online leads that my website generates and these people are just in their early stages of house hunting.  It's on their mind.  They're researching different areas.  They're familiarizing themselves with different home styles and features.  If they find a home online that they wish to see, I would never ask them to get pre-approved before showing a house.  I would meet them at the house and have a pleasant and friendly conversation and get a pretty good ideas of what their situation is like.

I'm a strong believer in building a pipe line of leads who eventually, will turn into prospects and eventually into sales.  By turning them away now, you might be turning away a sale 12 months from now.

I've ran into clients that are very closemouthed on their finances.  Telling them to get pre-qualified was almost an insult to them.   I usually take them out once, reiterate the importance of presenting an offer with a preapproval and that usually works. 

Thank you all for saying NO to that non-pre-qualified buyer. I met with him, showed him a house or two, and helped him get prequalified.  He bought a house within a month.  I guess he was just going from agent to agent until someone would HELP him.

Again, Thank you for telling him NO. And continue to send the rest of your non-pre-qualified buyers my way, I would love to help them buy a home.

I'm going to do my best to answer each and everyone of you individually, only because I always try to do my best.

What I didn't include in the post was that when I told him we needed to get him pre-approved he said, "They show us houses all the time without being pre-approved."  That was a key to me that he does this on a regular basis.  Then is when I said, "No REALTOR® I know would show someone a home without being pre-approved."

BB: With the addition of the above statement that I inadvertently left out earlier.....that was what really made me decide that a pre-approval was needed in this situation.  With that being said, I understand your and others points about showing them one or two. :)

Sarah: THere are responsibilities to preparing to buy a home... and pre-approval is one of them. :)

Vivienne: You are right, we aren't doing our sellers any favors by showing their properties to non pre-approved buyers........ and it was MY listing he was calling about.  :)

James: This person wasn't interested in meeting and talking about anything ... he only wanted to see the home and PRONTO.  :)

Rich: Absolutely correct, there are times when going out can be beneficial and I can feel those times, this wasn't one of them :)

Sean: NEXT is right........ and how do you like my new mascara?  (batting eye lashes) :P

Gary: Thanks for the vote of nice post... I truly appreciate it. :)

Carol: Absolutely... I agree.  Would you seriously go out to buy a dress without knowing what size was going to fit or the known ability to be able to pay for it? So if one  doesn't know what they qualify for how serious can you be?  I like to use the analogy of "getting pre-approved is another way of knowing what your comfort zone is as far as the price of homes to look at."  It's worked in the past, I'm going to keep using it.... and it's true. :)

Dave C.: Totally..... we need to know our clients are serious and getting pre-approved is also a form of showing ownership in the process. :)

Rick Callaham: I wasn't rude to the individual.  I explained the process and why. I'm generally a very caring person and believe everyone should be able to get a home... and I always want to help.  I just have a keen eye for situations when the real committment isn't there. I honestly believe that not a client I've worked with in real estate wouldn't offer to donate blood if I needed it.  That may sound extreme to you, but I believe it to be true.....  in the future you want to be careful linking and promoting yourself in others blog posts, some people would really come down on you for that.  :)  ( I did not mean that nastily, just what I have seen. :)

Sheryl: Safety first is always a wise decision. :) 

Ann: Good policy! :)

Keith: Sometimes it's the nature of the business. :)

Miriam:  Great thinking! :)

Michele:  My daddy used that "wish in one hand" line too.... great minds think alike!

Steve: Tried that...... he told me he had a banker.  So I asked if he'd discussed with him about getting pre-approved.  Nope!

Marvin:  If that works for you.... I've gotten burnt several times doing that....just didn't work for me.:)

Amy: EXACTLY! :)

John:  That cracked me up.... is the wrong way worth it? :)

Cindy: Absolutely! :)

Sharon: SO TRUE!!! :)

Joan: My thoughts exactly! :)

Rita: I invite your rant and value your opinion... thanks for giving it!  But honestly, I'm a REALTOR®. It's not my business to qualify individuals, or to do inspections, or to look for termites.  I leave that up to the professionals who specialize in it.... :)

George: I'm grateful to have you pipe in here..... because I don't feel that my specialty is qualifying folks for loans and I can't certainly call for a credit report. :)

Craig:  I asked a few questions and got all the red flag answers.  It's difficult to pass on business these days, but sometimes it is a necessity.:)

I want to thank each and everyone of you for your valuable input and for stopping by my hangout. :)

 

 

 

 

Oh my.  I agree with Rita 100%.  It is not difficult to pre-qual someone yourself.  As a professional, I am surprised that you would not want to learn to do this.  I noticed your comment....

"But honestly, I'm a REALTOR®. It's not my business to qualify individuals, or to do inspections, or to look for termites.  I leave that up to the professionals who specialize in it.... :)"

What?  Seriously.  I'm all for for everyone having their own individual system, but it sounds like a lot of folks are walking away from buyers or future buyers for silly reasons.  Perhaps I am missing something.

 

 

I guess it all depends how busy I was at the time. It sure is not a great lead, but if I was available, I would do it. But generally, it is a waste of time.

I take one particular buyer out regularly that isn't pre-qualified.  But she'll divorce me if I don't. 

Fran, 99% of the time, the answer is no, very rarely we will. But, ONLY if we find out if they will after the firest time, but no more than once. Hope that helps. And like I said it is very, very rare.

It's also written in the listing agreement as one of the listing broker's responsibilities...to show the home to approved (ready, willing, and able buyers).  I had one person call me a few weeks ago to see a listing, and said that the seller was being a snob about only allowing pre-approved buyers in because it's a buyers market and buyers should see anything they want.  Really.

No doubt this subject needs to be sugar coated when dealing with what sounds like a solid lead. In the end, no LSR, (Loan Status Report) then there's  no need to make an offer. The professional ethics of our business is diluted because the message isn't consistent on the street.

If you have a solid buyer presentation, which includes the pre-approval process explained, getting people  qualified and on a buyer broker is simple. Our time is precious. Respect it.

 

No doubt this subject needs to be sugar coated when dealing with what sounds like a solid lead. In the end, no LSR, (Loan Status Report) then there's  no need to make an offer. The professional ethics of our business is diluted because the message isn't consistent on the street.

If you have a solid buyer presentation, which includes the pre-approval process explained, getting people  qualified and on a buyer broker is simple. Our time is precious. Respect it.

 

Generally I would say no, but it also depends on my initial read of the buyer. It's possible they may not be familiar with the process, or could be a cash buyer, or may have other financial assets or advisors in place but just aren't ready to discuss that yet. In those cases it may very well be worth my time.

When I have someone call on one of my listings, I ask them a series of questions and start up a conversation.  I know they're hesitant to spill much at first, but it's important to us to know about their situation and I'm not a POP-TART (a Howard Brinton phrase about agents who 'pop up' to show a home without knowing anything about a buyer).

Also, I don't pre-qualify a prospect over the phone.  That's the job of my preferred mortgage consultant.  I get permission for my mortgage consultant to call them as soon as we hang up.  If they reach them and do a pre-approval, then I know they are serious and ready to buy.

One of the problems with Realtors today is that the consumer sees us all as the same...we're a commodity.  You need to show your professionalism and unique qualities of being able to service your customer at a higher level than what's typical in today's market.

You need to explain how you work to prospects and how your services can benefit them...show them why you're different and how you can save them time and money versus working with another agent.

Can you do that?  If not, then work on perfecting that skill and you'll convert a lot more prospects into clients.

This was a timely topic for me. I had a "buyer" call this week requesting to see two of my listings (which aren't vacant). After discussing the features of the homes, I asked him to tell me about what his plans were ... where is he moving from, does he own a current home, is it on the market, etc.

Well, he lives in another town. His home isn't on the market as he's just "thinking" about moving, and no he's not talked to a lender. I suggested the steps he should follow first before he begins viewing homes. I started to tell him that I could recommend an agent in his town to help with his home, and that I could help with a very good lender ...

At this point he cut me off, and said he was VERY offended that I would ask him such questions, as he has never had any other agent ask those questions or not want to show him a home. Then he hung up.

I feel my first responsibility is to my sellers when the home is occupied, to not cause them to interupt their lives preparing for a showing with a buyer who is months away from being able to buy.

Fran- you have an obligation to yourself and to the sellers of any home not to show their home to anyone that has not been qualified.

No one has cash anymore? We should never assume that they dont.

If not......

I will, for referral clients, show  2 vacant homes that are within close proximity to my office if not prequalified. They must ride along with me and on the way to home #1, I call a lender, explain that we will be looking for homes and need a pre-qualification faxed to the office and then  hand the phone to the potential buyer. If they complete the call with the lender, we will tour both homes and then tour others that meet the pre-qualification. Not qualified or wont complete the call? 2 homes toured, got out of the office and met someone new that also has friends, relatives, neighbors, associates and others that they may send my way.

How often we forget that the one that just left because of an immediate attitude will return the favor by badmouthing you and your agency for days......a good thing?

You may want to rethink the way you approach this issue  as every single person is an opportunity to gain more business. THEY may not be your client but....chances are, they know someone who might or.....might not be....and it's all up to you!

We all need to be carful but, I have seen many an agent take the defensive on this subject for the wrong reason.

Fran

You have to go with your intuitive feeling.  The process helps us to help our customers.  I think that statistically the serious buyers want to know what their limits are. Conversely, the tire kickers could care less.  A cash buyer knows eactly how much they will spend period; and will disclose that to the REALTOR®. Since cash buyers are in short supply and lookers are in high supply anyone looking to circumvent the system is not putting themselves in the best possible position to make an offer should the perfect house be presented.  A large number of our local listings require "proof of funds or preapproval letter with offer"

Hi Fran -

I am newly licensed (Jan. 2) and have shown lots and lots of homes without even asking about pre-qual or pre-approval.  Right now, I feel like I need to develop my instincts, as well as, develop my skills and abilities, while showing homes and meeting with customers.  Plus, I am trying to expand my SOI and if I can make an impression on these customers, maybe they will keep my card and when they are out in their world and someone mentions to them about wanting to buy a home, the customer will share my contact info with their friend.

 Down the road, as I develop my business, I can see where I might move into that mode of asking the pre-approval questions.

Fran,

 As an LO, I can tell you that I always advise my Realtor Partners to get their potential clients Pre-Approved. There's nothing worse than having your client fall in love with a home they absolutely cannot afford! Then of course when I can't get them approved for that home, we both lose the client to someone with unscrupulous sales tactics. We've all encountered them unfortunately...

My best advise for new agents is:
With the price of gasoline today, it only makes sense to have your clients pre-approved before they get in car!

As far as cash buyers, and yes they do still exist... As a courtesy for any of my agents, I always pre-approve their cash buyers as well. Not by pulling credit, but by obtaining VOD's (Verification of Deposits). If the buyer is truely serious, (s)he will have no issue providing the information. Keep in mind that this is a one time process, including investors. Once we have been able to establish the capacity of the buyer, the agent can sell with confidence over and over again!

Anybody can call and tell you that they are a cash buyer. Are you willing to take the chance of driving them around for hours, only to find out they aren't serious? A serious cash buyer is usually a business person that understands that in order to establish a working relationship, at some point they will have to show proof of their ability to perform.

I had two such calls this weekend!  No I am not pre-approved.  My reply, may I have my lender call you?  No.  They both needed to see the house in a half an hour.  I was all the way across the city in Henderson for caller #1 and I was in between working with buyers for caller #2.  Lately it seems that they are expecting us to drop everything, including working with pre-approved buyers just to get them in the house!

Like you Fran, I am not so desperate to take an hour out of my day to show a non-approved, non committed buyer a home.

Fran~You have it down to perfection on this post my friend. I refuse to show buyers homes without being pre-approved, because it is a waste of time otherwise. What was the result in your meeting? I have all too often seen other agents, especially in my past office take clients to numerous houses without being pre-approved. That's when the buyers set their expectations high for us to show them homes anyway. 

Curt: Thanks for your input and in reference to your comment: "Oh my.  I agree with Rita 100%.  It is not difficult to pre-qual someone yourself.  As a professional, I am surprised that you would not want to learn to do this."

I have to tell you Curt, I am a professional :) that's why I stick to doing what I am suppose to do as a REALTOR®.  I'm sure you weren't suggesting that I'm not professional... in my little piece of this country we leave mortgage consulting up to those professionals. :)

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Wayne: I see your point. :)

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Lane: Keep up the good work... it's Valentine's Week, show her a couple extra. :)

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Missy:  Totally agreed!

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Tamara: TOTALLY GOOD POINT!

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Kevin: GREAT input!  Thanks.

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John: In some instances it would pay off, rare instances.

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Dan: In regards to your comment: "Also, I don't pre-qualify a prospect over the phone.  That's the job of my preferred mortgage consultant."    My opinion exactly.

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Elaine: I feel responsible too!

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Mark: THanks and I take that obligation very strongly.

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Christopher: I appreciate your outlook.... and I'm very careful not to be defensive with phone prospects. You're correct in saying everyone is a possiblity to earn more business, but truly each individual needs to be ready and willing to follow the process of buying a home.

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Allison: Same here!

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Eli.... thanks so much for chiming in! Re: As an LO, I can tell you that I always advise my Realtor Partners to get their potential clients Pre-Approved. There's nothing worse than having your client fall in love with a home they absolutely cannot afford! Then of course when I can't get them approved for that home, we both lose the client to someone with unscrupulous sales tactics. We've all encountered them unfortunately...SO truly if they didn't qualify for the home that they were wanting to see then we have a disappointment from the get go.  Not a pretty situation.

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Renee: Our time is precious and we have to manage it carefully. Yes there seems to be an abundance of people here too that want you to STOP what you are doing right NOW and show me this house.  Granted, I am one for dancing to the clients drummer.... I do anything to please them....but they need to be pre-approved.

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Julie:  I don't know about perfection, but I wanted to get the general feel here in Active Rain from other realtors, loan officers and everyone.

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Thanks to each of you for giving of your time to comment here, your input, outlooks and opinions are appreciated and they lend to us all a growing environment where we can learn from one another.

Fran

 

I have taken people out to look at property without a pre-approval.   Some people don't know the process and need to be educated.  I then immediately talk to them about a pre-approval and steer them in the right direction so they can have the letter before our next meeting.

It does sound kinda crazy that they were hesitant to get a preapproval. I'd like to see them put an offer on a house and tell the seller's they're hesitant about getting a mortgage

Make an offer without a pre-approval or cash.....no way. When exploring the options available to them....if I have the time and the homes are vacant....why not?

I had a client who wanted me to show him a home he did not want to buy (and could not afford) so that he could look over the wall at the home next door (which was NOT for sale) because it was his "dream home" (it was once for sale, but went pending before he got the offer in).  Hmmmm....

I have shown clients homes without a pre-approval letter and the reason I was able to work with them is because the agent they first talked to refused to show the home without a pre-approval letter. They ended up buying. But, then again I could have ended up waisting my time and gas. Jessica Cordell

Joyce: I did my best to try and educate this buyer on the process, sadly I think he only saw things his way.

Christy: Right........ pre-approval is part of the offer.......we need it to know their comfort zone anyway.

Christopher:  This home wasn't vacant, but if it were there might have been a different ending to the scenario.

Paula: You have GOT to be kidding me!

Jessica: It's a toss up.  What I do is set standards for how I work with everyone and a pre-approval is part of my standards.

Thanks to everyone who has participated here.  It's truly appreciated.

Fran

I would like to think that I would say NO, but I know in the recent and distant past I have been guilty of it. Recently I met a couple that I didnt think could buy anything, and they were being slow with the preapproval process. I showed them a few homes under $200k. They finally got approved for more than $300k, turns out they had a nearly perfect credit score. I have 100 more stories where the buyers werent approved. I guess its a double edge sword. Thanks for sharing.

I would like to think that I would say NO, but I know in the recent and distant past I have been guilty of it. Recently I met a couple that I didnt think could buy anything, and they were being slow with the preapproval process. I showed them a few homes under $200k. They finally got approved for more than $300k, turns out they had a nearly perfect credit score. I have 100 more stories where the buyers werent approved. I guess its a double edge sword. Thanks for sharing.

I would like to think that I would say NO, but I know in the recent and distant past I have been guilty of it. Recently I met a couple that I didnt think could buy anything, and they were being slow with the preapproval process. I showed them a few homes under $200k. They finally got approved for more than $300k, turns out they had a nearly perfect credit score. I have 100 more stories where the buyers werent approved. I guess its a double edge sword. Thanks for sharing.

No way. I played that game and wasted my time before - no longer! I actually had someone who couldn't even get approved try and get me to take them to see the house anyway. I almost did it until I reminded myself that I don't get paid hourly. If they can't get pre-approved, let them move on to some other poor sucker who wants to gamble on it. I can not afford to gamble with my business.

Jennifer:  I'm happy for you that you had success with it.  In the beginning of my career I did it and was really burnt. :)

Stacey: You are right, I don't think any of us can afford to gamble with our business.

Thanks to both of you for stopping by.

I kinda skimmed through all these responses to the question.  I think we also need to be aware that people come in with a letter from a lender saying they are preapproved and the letter is worthless!  An agent in our office had a couple who'd been told they qualified and were approved for up to $150,000.  She had them go to another lender who said they couldn't afford anything.  TWO LENDERS.  Vastly different stories.  So in my opinion we need to be able, as agents, to ask a few questions about credit, income, debt ratio, etc. and form some opinions of our own.  We do the prequal as a beginning.

I met a wonderful couple one Saturday afternoon as I sat at the office.  I found out what they did, how much they made, and all the things I needed to know to tell them they were ready to buy!  They did and then they let me resale.  If I'd been dogmatic about their going to get prequalified before visiting with them, I'd have lost them.

Barbara: I appreciate your insight. :)

When I orginally became a Realtor, I would have shown them the home. Now, I simply will not. It is not fair to anyone involved.

Never!  I get 12mpg.  No one is getting in my car unless they are pre-qualified.  LOL

Dear Fran,

You are right, they don't let pilots fly a 747 without being qualified.

 

Johnny " Bloggo " Hurbon

Tierra Antigua Realty

google   benson horse property

Fran,  I was not meaning at all to imply you were not professional.  The point I would like to relay is that it is crucial as a real estate professional to know how to pre-qual and have a solid financial understanding every bit as much as having a dependable and honest mortgage expert that you can call anytime.

From most of the comments here, it comes across as if someone isn't pre-qualed they are not worthy of your time.  To me, that is crazy.  I am probably the biggest advocate of spending time wisely that there is, that is why real estate professionals need to educate themselves in a good base knowledge of finance...not to be an expert, but to be able to pre-qual a buyer in 5 minutes or less anywhere anytime.

The reason that I am #1 in my market month after month and year after year is simply this.  I do what others don't.  2007 and so far this year I am enjoying the some of the easiest success I have ever had simply because other Real Estate professionals will not take the extra 5 minutes to do this.

Typically after this occurs, my new clients say, "Why did that other person assume I could not buy, or why would they not help, or Why don't they know how to do this." It happens everyday.

I see so many agents suffering from lack of clients these days and it saddens me to see that, when gaining trust and expanding your business is so simple.

Sorry to rant.  Just want to try and help those that want to improve their business.

I don't show homes until a buyer has talked with a lender, or we sit down and I prequal them myself (without the benefit of credit scores though).  If I am showing one of my listings, I ask if they are working with an agent, and then #2 what lender they are working with.  If the house is vacant then I want to know that someone has seen this person and gotten ID before, and if the house is not vacant, I want to make sure my sellers are being inconvenienced for only legitimate buyers.

Selling a home is stressful for sellers.  I think out of consideration we need to only show serious buyers homes.  Someone who won't do a prequal with a lender isn't serious.

Hi Fran,

I am not a Realtor so I am not sure if I should speak out or not. But red flags went up reading your post. You should not meet this person alone. Also why would someone not want to be pre approved? Yes, I am sure we all have knowledge of what we can and can not afford but why not know exactly what you can afford that way no one is looking outside there budget. Realtors are not glorified taxi drivers you have costs too.  One other thing I would not want a Realtor to bring someone through my home that was not qualified to buy it.

I often do show one property to callers, but only after asking them a standard set of questions that they need to answer in a cooperative and friendly spirit. Loosely, the dialogue and questions go something like:

1) As a matter of ethics, the State of Ohio wants all realtors to ask: "Are you working with a realtor in any way, shape, or form?" Not surprising, a lot of them say yes, to which I immediately ask "Who is it by the way?" before they have a chance to recover. Quite often they can't even come up with a name quickly. If they said yes, then of course I explain the ethics clause and advise them to get their realtor to make an appointment.

2) Have you looked at any properties with a realtor recently? (Wait for answer.....) "The reason I ask is that Ohio real estate licensing law mandates that realtors go over a paper called the Consumer Guide to Agency Relationships upon the first meeting with all consumers. Have you ever had that paper explained to you?"  (Wait for answer.... make new decision based on answer and attitude...) Tell them that we will need to go over that information when we meet at the property.

3) "Have you had a chance to speak with a mortgage loan originator and become pre-approved for a mortgage loan yet?"  (Wait for answer...)

4) "Would it be alright if I have so-and-so from so-and-so mortgage lender give you a call so that you will be confident when you find that dream home that you will be able to move forward and make an offer on it?

 Based on how the conversation went, I make a judgement on whether to meet these potential buyers or refer them to another office agent that is asking for those type of referrals.

In Ohio, realtors must present the Consumer Guide To Agency Relationships before we are permitted to show a property, and also before we ask meaningful questions as an attempt to prequalify potential buyers.

Nathan: My sentiments exactly

Melissa: Yeah at these gas prices pretty soon we'll have to be charging a gasoline charge!

Johnny: Good analogy... and I wouldn't try to fly a plane either. :)

Curt: Thanks for your input, but by reading the replies not everyone agrees and we can't all be wrong. :)

Melina: you are correct someone who won't get pre-approved isn't serious.

Trace: Thanks, but you don't have to be a realtor to comment... You are right it is stressful for sellers, especially in a divorce situation.

Jim: Good Points!

Thanks to all of you for stopping by!

Every situation is different, but I do not believe I would get too involved until there was a solid pre-approval letter.

Jim:  Thanks for your input.  You are right on not getting to involved until there is a solid pre-approval letter.

 

I see new realtors falling into this trap (and some veterans too). In most situations it is best to stray away.

Amen, I just gave similar advice to another post in the group about Rookie Mistake #1.   Thanks

this post with comments is so helpful. I have a lot of new property listings, and often get phone calls & try to go show it. I realized last fall, though, that I'm wasting more time and not getting the sales. People are looking a lot on their own and for some reason I feel an obligation to show them the property, AND THEN ask the questions... I'd wasted more time with in-office RECADs & follow-up & chasing down that went absolutely nowhere... So I cut to the chase & show them the vacant house & then see if there's more to it. I will now remember to ask the KEY QUESTION: Are You Pre- Qualified? Thanks for this post!

Donna: I stray away too!

Tom: Thanks for the support.

Mara: Glad you found it helpful!!

I invite you all to listen in on my Blog Talk Radio Show to hear from The FHA Expert, Jeff Belonger, and his feelings on what was discussed in this post.

http://activerain.com/blogsview/381479/FHA-Mortgage-Information

 

Thanks to everyone for stopping by!

No, I don't have that kind of time. 

 I had a similar thing happen a couple of weeks ago, however the couple were preapproved, but they wanted to look at homes that were a minimum of $100,000.00 more than they were pre approved for.  They have no down payment money and are looking at 100% financing.  Even the lender told them they couldn't afford the homes in the subdivision they'd driven through and fell in love with.

I emailed them a listing that had everything they wanted, and at a price they could afford.  Neither I or the lender have heard from them since.

 

I don't make a habit of doing it but have done it on occasion.  Sometimes its a cut feeling.

Sylvia: NEXT!

Rick: And that feeling isn't fun!

Thanks to you both for stopping by!

Pre-Approval is a MUST for me.  I spent a lot of wasted time in the beginning doing that but never again.  I don't want a pre-q,  must be pre-approval.  Also, I do ask questions upfront mostly but once I get a feeling that they may not be serious I ask if they are working with a lender.  At that point we either move forward or we don't.  Who wants to ride someone around for six months and later find out that looking at homes is just a hobby for them.  Thanks for sharing

Fran, I commented earlier, but have been following the comment stream and I just had to come back and mention how I love the way you respond to people!!! Very Classy. I am your latest subscriber:)

Sonya: I think we all do things in the beginning and then we set some rules and policies for ourselves.

Karen:  I don't mind telling you that you had me blushing when I read what you wrote.  I'm grateful for your observation.  I guess I just kind of figure that if people take the time to make a comment that it should at least be acknowledged.  You've made my day, I love being classy!  Thanks so much for subscribing. :)

Thanks to both of you for stopping by!

I know im a few weeks behind on this, but wanted to chime in my thoughts.  I dont take people anywhere without a pre-approval.  They take 15 minutes on the phone with my lender.  On more than one occasion that 15 minutes on the phone has saved me days of showing property to unqualified buyers.  If the person is serious of buying, they should be willing to get the pre-approval.  Plus, I look at them getting the pre-approval as them getting a new shiny credit card that they are just dying to spend.  Once, I was working with friends and didnt get the pre-approval up front because they were friends, and said they had money for down payment, have bragged about their job, etc... Well we wrote the offer, went under contract, got 3 weeks into the deal and hours & hours of work invested to find out the credit score was in the low 500's and had all kinds of liens.  Needless to say, nothing was gonna help her.  Also, another time, had a client come to my office wanting to buy multiple investment properties...they were looking to get 3-4 properties, all around 300k.  They drove up in a nice new BMW 7 Series, dressed to the 9's and "looked and talked the part"  Well, we called to get pre-approvals, and found out they couldnt buy something for 30k let alone 300k.  They were wanting us to book off almost a full week to help them.  I am sure glad we took that 10 minutes up front.  As for us losing buyers....it hasn't hurt our business, we are still the #1 team in our office and have been for over 6 years.  So, I agree w/you Fran!  GET THEM PRE-APPROVED!!!

Jeremy:

Thanks so much for stopping by and commenting........ Glad you agreed with me and that pre-approval has worked for you too!

Fran

I have done it before but they were good friends of mine im not going to do it anymore