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Is it reasonable,ethical or even legal for a buyer's agent to ask for Income, Credit Score, Debt to Income ratio to be able to place an offer after you have provided them with a pre-qualification letter from one of the largest banks?
I wanted to place an offer but was asked to provide these. I specifically told them that the bank checked tax returns, paystubs, bank statements and ran a credit check before issuing the pre-qual. I was given an answer that pre-qual doesnt go into these details and hence they need them.
Is this normal?
Appreciate your in-sights!
Thanks.
Is it reasonable,ethical or even legal for a buyer's agent to ask for Income, Credit Score, Debt to Income ratio to be able to place an offer after you have provided them with a pre-qualification letter from one of the largest banks?
I wanted to place an offer but was asked to provide these. I specifically told them that the bank checked tax returns, paystubs, bank statements and ran a credit check before issuing the pre-qual. I was given an answer that pre-qual doesnt go into these details and hence they need them.
Is this normal?
Appreciate your in-sights!
Thanks.
It's not illegal.
You mention having a "pre-qual". Maybe that terminology caused your agent to request the information, because as a rule, a "pre-qual" (vs. a "pre-approval") is mostly issued after some phone conversations and little if any paperwork submitted to the loan officer and can't really be relied on = worthless.
A better way to approach this IMHO is to call the loan officer and ask on what basis they issued the "pre-qual"/"pre-approval"; at least that's how I handle it. Many buyers do not feel comfortable providing too much financial information to their agent, for whatever reason; something that should be respected I believe.
BTW, just because it's "from one of the biggest banks", doesn't mean anything--depends to a large extent on the loan officer you're dealing with, or how fast you want "a piece of paper".
Rentals are another situation altogether.
Last edited by Elke Mariotti; 10-25-2017 at 10:06 PM..
You seem to be using the terms pre-qualification and pre-approval interchangeably, when they in fact mean very different things.
The agent is absolutely right that a pre-qual doesn't typically go into those details. Anybody can get a pre-qual letter after a brief phone conversation with a loan officer. The pre-approval letter comes later, and that goes into more of your financial detail.
If you don't like submitting this information, you're really not going to enjoy the process of applying for a mortgage.
It's not only reasonable, ethical and legal, it shows that the agent is doing his job. A big part of considering an offer is to have a confidence level that the buyer will be approved for a loan. So, this information is vital to the seller.
It's not only reasonable, ethical and legal, it shows that the agent is doing his job. A big part of considering an offer is to have a confidence level that the buyer will be approved for a loan. So, this information is vital to the seller.
To me it’s not the agent’s business. Credit score, really? Is the agent doing lending services?
I agree with others that a pre-approval letter from a bank should suffice. Something that states that X is approved to purchase a price up to Y. And then, that is something to discuss with the buyer agent and not provide to the seller agent.
I had a seller once demand rediculous details before going to contract and it almost derailed the deal when we threatened to walk away.
After just purchasing a home a few months ago, you need a pre approval (not qualification) to even be considered in the offer process. Also, providing income & proof of down payment isn't uncommon - I did for 2 homes I was trying to purchase in Garden City. I think it's prudent for the agent to do her homework. Also, you have a better chance of getting the home if you can prove you have income and the down-payment readily available. By providing, I was able to win both offers vs others - depending on area, it's competitive right now in Nassau. Good luck.
To me it’s not the agent’s business. Credit score, really? Is the agent doing lending services?
I agree with others that a pre-approval letter from a bank should suffice. Something that states that X is approved to purchase a price up to Y. And then, that is something to discuss with the buyer agent and not provide to the seller agent.
I had a seller once demand rediculous details before going to contract and it almost derailed the deal when we threatened to walk away.
What you can demand, and what you can get away with, are two entirely different things, and vary not only on market conditions but also from person to person. If I were selling and had a cash offer in hand (often the case in hot markets, particularly with Asian buyers) you'd better believe I'd be asking all sorts of questions of the guy who might be offering more but has to take out a loan.
What you can demand, and what you can get away with, are two entirely different things, and vary not only on market conditions but also from person to person. If I were selling and had a cash offer in hand (often the case in hot markets, particularly with Asian buyers) you'd better believe I'd be asking all sorts of questions of the guy who might be offering more but has to take out a loan.
Note it’s the BUYER’S agent asking for this, not the seller. As long as there is a pre-approval letter for the amount of the mortgage needed that matches the price of the home that should be enough. It’s then the buyer’s agent’s job to get the deal through and convince seller that they want to accept the offer.
And you are correct, as long as it doesn’t break federal discrimination laws the seller can sell to whomever he/she wants, for any reason.
After just purchasing a home a few months ago, you need a pre approval (not qualification) to even be considered in the offer process. Also, providing income & proof of down payment isn't uncommon - I did for 2 homes I was trying to purchase in Garden City. I think it's prudent for the agent to do her homework. Also, you have a better chance of getting the home if you can prove you have income and the down-payment readily available. By providing, I was able to win both offers vs others - depending on area, it's competitive right now in Nassau. Good luck.
Doesn’t a pre-approval letter validate income and down payment? It’s basically the bank saying “if you buy a house for up to $x price (assuming it appraises for such) you are approved for a mortgage at y rate”?
If anyone wants “guarantees” they should hold out for cash-only offers. Will work well in Garden City, not so much in mid-Suffolk.
But then again, I would only make an offer for something I can and intend to buy. Must be a lot of lowlifes around who waste people’s time.
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