Requiring a pre-approval letter for showing? (real estate, loan, houses)

[Grass Is Greener]

I've read in the Real State professional forum that in some markets the sellers require a pre-approval letter before they can schedule a showing. Does this happen here in the Triangle? It seems a bit excessive to me, unless we are talking about high end homes in the $1M+ price range.

[saturnfan]

Could help filter out criminals whose intent is not to buy but to case the home.

There was an awful case where a realtor was almost murdered by a person who lured her to show an empty home.

[jerseygirlonthemove]

I actually would recommend it. It weeds out the serious buyers from the not so serious buyers. Plus when an offer is made you should absolutely know that they have been qualified so you to don't waste your time.

[nynraleigh]

I so agree with this...when I was looking to buy, I had been qualified so I knew exactly what price range to look in. I would expect the same from potential buyers interested in my home. I would not want to waste either sides time, as well as the agents time. Time is money... I wouldn't look at 500k homes, knowing I was unable to afford them...

Originally Posted by jerseygirlonthemove

I actually would recommend it. It weeds out the serious buyers from the not so serious buyers. Plus when an offer is made you should absolutely know that they have been qualified so you to don't waste your time.

[MAtoNC!]

When you are selling your home you want to protect your investment. I can understand it and wouldn't be surprised to see it more.

[jerseygirlonthemove]

I in fact will not permit anyone to visit my home unless they have been pre-approved. I've enforced this with my agent. I will also not look at offers that aren't accompanied by a pre-approvel.

Sadly, there are many uneducated buyers out there who do not do their financial research. They think that can afford a 500K home when in fact they may be luck enough to be approved for a 300K home. I'm hearing more and more that even though a buyer and seller agree to a price and move forward with everything, the buyers are pulling out at the last minute b/c they can't afford. By that time you've been in contract for a month or two and you wind up back to the drawing board.

A side note on open houses. Anyone can come to your home during an open house, qualified or not qualified. Most, sadly, are window shopping and are not serious buyers. We had 3 open houses over the course of the last 2.5 months and we stopped doing them because nothing ever came from them and neither of us wanted to continue to leave our home for 4 hours each time.

Good luck!

[rfb]

Just to add another point of view. In both of my houses I've bought in the past 15 years, I was not pre-approved for a loan before finding the home I eventually purchased. To be honest, I never even thought of getting it done. If you were selling your home and restricted it to only pre-approved buyers, then I would never have seen it. With the current market, do you really want to be reducing the number of potential buyers?

[MikeJaquish]

It can be a bit excessive.
It is the Buyer's Agent's ethical responsibility to assure the client is qualified to buy listings that are shown.
A preapproval is not worth much without a name attached to it.
My Buyer client's identity is generally no one's business until an offer is written. That is part of my fiduciary duty to my Buyer.
It is confidential information that should not be passed to the Listing Agent without a need to know.

For instance:
Suppose I have two listings. One is at $295,000 and one is at $385,000. I make Buyers show their pre-approval to enter.
VickiR (Hi, Vicki! )has a Buyer who looks at the $385,000 Listing after presenting a preapproval letter for that listing.
Then, the Buyer decides they want to see the $295,000 listing.
Now I already know, and by NC Real Estate Law must tell my Seller, that the Buyer is qualified to buy a much more expensive property. So, the Buyer's financial hand is tipped that their resources are significantly better than needed. My Seller digs in and won't negotiate. No deal is made.
Vicki's Buyer is harmed, and the Seller may even have been harmed too.

It really isn't difficult to envision the above occurring.

There are many ways to discourage people from visiting and viewing a home. This one can serve quite well to do so. I would construe it to be generally indicative of an unmotivated Seller.

And I would "Never say 'Never.'" In a luxury home in particular, or a "sick house," with chronically or terminally ill residents, or other factors, it is reasonable to want to keep nosey tourists out.

[NYer]

My mom is a realtor in NY... some people have art or antiques that they can't remove prior to showings, so they want pre-qualified buyers only to further safeguard their stuff & keep a handle on the # of showings.

[HGrommet]

We are shopping for our first home and I'm talking about like paying no more than 60,000 and we have had a couple people tell us we need a pre-approval letter in order to look at it. We even had a couple agents see our approval letter that states we are approved for what they are asking for the homes and they have literally raised the prices. We found a house we liked and bid 4000 under asking price and they pay closing. They countered with 5000 above asking and they pay half closing. I get the feeling paperwork is hard for their hands sometimes no matter what price range the houses are.