I believe that the answers to these questions will vary based upon the stage of negotiations you are in. Let me provide my perspective in that way.
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Originally Posted by verobeach
Is the buyer serious,
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Prior to working with some buyers, the agent working for them should have determined that the people have the desire and ability to act, otherwise they'd be wasting their time. However, they can only do so much to determine a buyer's seriousness. The buyer's desires can change over time, or they can come to conclusions that a particular neighborhood/town/or even state doesn't meet their needs once they've seen it.
An astute buyer is also not going to open his financial records to prove their assets to an agent so the agents have to take some things just at their word. Some issues are simply confidential and do not need to be disclosed at that time.
In any case, determining the seriousness of the buyer is something between the agent and their buyer. It is not for disclosure to you, the seller, especially at the pre-offer stage.
For example, a buyer might want you to think that they were just "luke-warm" about your house and area, that's it's a compromise if they eventually make an offer, and that they'll only buy your house if the price is right, but that they'd really like to be somewhere else. Making you think that they're not overly excited and only margionally serious will help them in their negotitions when they do make an offer.
If you thought they were overly excited and so serious that they'd sell their first born to buy your house, you'd probably not drop your price as much when an offer was made. That's why they wouldn't want you knowing how serious they were.
Once an offer is made, it's obvious that the buyer is serious to some extent, at least to the extent that his offer allows. If they were not serious, an offer would not be made because they would be committed to buying the house if you signed the offer without any counters.
Beyond that, at the offer stage, the seriousness remains in question. That's the way I want it to be because it would help me, the buyer, get a better deal. I would hope that you, as the seller, might be motivated to just give in to my terms or offer something less than you would have otherwise offered. I would want you concerned with chasing a qualified buyer away who I would hope you perceived as only marginally serious but qualified.
Quote:
Originally Posted by verobeach
has he sold his own house
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Such a thing may not be an issue and it's certainly not something for disclosure to a seller before an offer is made. Many people carry multiple properties or can buy your house for cash.
The qualifictions of the buyers are something to be discussed between the buyers an their agent. For the same reasons listed above, there are reasons why a buyer wouldn't want such things disclosed to you before an offer is made.
Once an offer is made, the terms of the offer will show whether there is another property involved. If there's no sale contigency, then it's a non-issue for the seller of the new property. The status of other properties would be none of the seller's business as long as the buyers are quaified to make another purchase.
If there is a sale contingency, then the seller knows the buyers have to sell another house. They have a right to make that offer, but the seller also has a right to reject it or demand certain things, like 72 hour right of refusal and/or an evaluation of the listed price and market of the buyer's other house. It will help you determne if the buyer has their house priced to sell or priced to sit. The answers will help he seller decide to accept, counter, or reject the offer.
Quote:
Originally Posted by verobeach
can he afford my house,
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Again, at he preoffer stage, such qualifications are between the buyers and their agent. The agent woul be wasting their time if they were taking buyers to houses they can't afford. They'd be tour guides who were working for free, and that's not their job.
As for disclosing to a seller what a buyer can afford, at the pre-offer stage, I wouldn't want that to happen. It's none of the seller's business
at that point. It only becomes the seller's business if the buyer attempts to enter into a business relationship.
So, once an offer is made, that is when a seller needs to know if the buyer can follow through with their offer, not that they have the ability to follow-through on the full price of your house. That can be done with a pre-approval from the bank or by proving that they have the cash availale to complete the offer.
It may not be an entire disclosure of their capabilities, for example the pre-approval may actually be for a greater amount, but all that a buyer needs to show you is an amount on the letter that, together with their down payement, adds up to the offer. It's not a lie because their
approval is for a cetrtain amount
or less. They're just showing that they are able to perform on their offer, but not showing their entire hand. Anything else about their financial situation, beyond being able to perform on their offer, is simply none of a seller's business.
For example, if a seller saw that a buyer was preaproved for a much higher amount, they would be more likely to counter at much higher price. If the seller thought the buyers were already maxed-out, there's the chance the seller might accept the offer or only counter a little higher so they don't blow the deal by asking for something that the buyer can't assemble.
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and has he been prequalified.
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Again, not everyone needs to be pre-qualified. Even if they do, at the pre-offer stage I wouldn't want a seller knowing anything about my financial situation. There's no guarantee that I will make an offer on their house, so they have no need to know.
Once the offer is made, proving an ability to perform on the offer makes the offer stronger. It's smart for the buyer to make an offer from a position of strength. If they don't have proof of their ability to perform, the seller can reject the offer or demand that they provide proof. Again, all a buyer should do is prove that they have the ability to complete their offer, not what the seller thinks they should pay.
Quote:
Originally Posted by verobeach
Are sellers still allowed to ask these questions?
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Sure they do, but the buyers don't have an obligation to answer. I think any smart buyer would provide you some answers based upon their stage of negotiations. For me, it would be under the conditions wrtten above.
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