Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If I am supposed to put my blind faith in a stranger to negotiate aggressively on my behalf despite the fact that he/she will make more money if I spend more money, then you're just going to have to have faith that I'm not lying to you about my finances.
That's where a buyer needs to step back, and realize that they're working with the wrong agent. If your agent isn't aggressively attempting to save you money, you're talking to an agent that hasn't built a long-standing real estate business, or if he has, he did it on accident.
Truthfully, I make far more money in referrals because of how one client felt I saved them money. Steering a client or an investor into a LOWER price point because it's the better value or secures a lower PITI with similar market rents - that's the sign that you've found a realtor that has an interest in developing long-term business contacts, and not near-sighted commission goals.
What's sad is that we'd likely never be able to work together, so you might never meet a realtor like myself. I require that you've gotten a pre-approval from your lender (unless perhaps we've worked together before), and I don't need to know your finances, but I do want confirmation from your lender that the price that you've told me you want to buy in is one that you can afford. That's it in a nut shell.
How many horses are we going to beat to death today?
I have a 5k limit on my credit card. When I go to best buy to buy a new flat screen why don't they up the price from $500 to $5000 b/c $5000 is what I could potentially spend.
Lots of people woud rather have a nicely decorated house, cars, toys, trips than a big empty home so many people buy homes well below what they can afford.
I just don't get why people think someone prequal for more means they will pay more.
ONe has NOTHING to do with the other.What I'm prequalified for has absolutely NOTHING to do with the value of your home
You're trying to use perfect logic in an illogical world. My DUMB argument is that how much you can afford changes people's perceptions in negotiations. If you think thats wrong, well.... you're entitled to your opinion.
No whether I can buy the house 3 times over or if I'm just scraping by to qualify for that purchase price changes the value of the house, but when the buyers are arguing over 5K or 10K it can change your opinion of whether they can or will move that amount.
Saying that a house has a true fair market value is incorrect. its not a commodity with thousands exactly like it. A house can be worth 400K today, and 425K to the right buyer tomorrow, or 350.
You're trying to use perfect logic in an illogical world. My DUMB argument is that how much you can afford changes people's perceptions in negotiations. If you think thats wrong, well.... you're entitled to your opinion.
No whether I can buy the house 3 times over or if I'm just scraping by to qualify for that purchase price changes the value of the house, but when the buyers are arguing over 5K or 10K it can change your opinion of whether they can or will move that amount.
Saying that a house has a true fair market value is incorrect. its not a commodity with thousands exactly like it. A house can be worth 400K today, and 425K to the right buyer tomorrow, or 350.
You make a good point, I was actually considering mentioning the same thing in my post.
You being approved for an amount but logically and factually that has no bearing on what the house is worth in general, what it's worth to the potential buyer and really should mean nothing to the seller either.
Like you said though, sometimes perception means more than reality.
Personally what someone was approved for would have no bearing on my selling price and I would not take that into consideration at all in negotiations but there's lots of illogical people out there so you make a valid point.
You're trying to use perfect logic in an illogical world. My DUMB argument is that how much you can afford changes people's perceptions in negotiations. If you think thats wrong, well.... you're entitled to your opinion.
No whether I can buy the house 3 times over or if I'm just scraping by to qualify for that purchase price changes the value of the house, but when the buyers are arguing over 5K or 10K it can change your opinion of whether they can or will move that amount.
Saying that a house has a true fair market value is incorrect. its not a commodity with thousands exactly like it. A house can be worth 400K today, and 425K to the right buyer tomorrow, or 350.
That's exactly it... you can shop the same make/model at all sorts of different retailers. Completely irrelevant when it comes to RE. You'd have to use something along the lines of a unique collector type item for a valid comparison.
So at the end of the day, there's no reason for anyone in the transaction to know your top end as a buyer. Frankly it doesn't make that much of a difference since simple reality is that you're going to have people walking through a house that have no intention on offering.
That's exactly it... you can shop the same make/model at all sorts of different retailers. Completely irrelevant when it comes to RE. You'd have to use something along the lines of a unique collector type item for a valid comparison.
So at the end of the day, there's no reason for anyone in the transaction to know your top end as a buyer. Frankly it doesn't make that much of a difference since simple reality is that you're going to have people walking through a house that have no intention on offering.
S'truth.
Even if they could afford to buy 2 of your house, they simply might be window shopping. No way to know.
And this is something I tell my dear husband when we are out looking... if we really love a house, we should at least attempt to negotiate a price we are willing to pay... not wait to see if they'll lower it a bit to what we think we want to pay...
It's not like they've got more houses just like the one we want, on exactly the same lot, over that the nearest House Store.
So, we attempt to negotiate... we see if we can get to a price that works for us. If not, we walk away, knowing we gave it a shot.
If we never try, we never know what someone might have agreed to take for a property.
No...this makes perfect sense in *any* market. Sellers shouldn't have to waste their time in contract negotiations with someone who can't buy the house. Though even a fancy letter can still mean the deal fall through because the realities of buyer financing.
This is the time that the lender should send a letter of the exact offer price the buyer is presenting (not how much the buyer is capable of spending).
In the end, though, no letter from anyone protects anybody from a bad deal or truly unqualified buyers.
If I am supposed to put my blind faith in a stranger to negotiate aggressively on my behalf despite the fact that he/she will make more money if I spend more money, then you're just going to have to have faith that I'm not lying to you about my finances.
We would all like to have a sure bet but if the world worked that way, Las Vegas would be out of business.
Okay, let's look at this another way. If you were building a house, you would naturally put in the foundation first, right? You wouldn't build the roof first, or frame the walls, or put in windows, or put in the kitchen, before you build the foundation.
Getting pre-approved for a loan (not the house approved, YOU approved) at the very beginning of your home search is the same thing as far as the project of purchasing a house is concerned as is starting with installing the foundation when you're building a house. You'd think someone who skipped that first step in building a house was foolish, correct?
Likewise, providing your agent with the pre-approval letter (or at least letting them talk to your lender who can confirm for them that you are pre-approved - as said, pre-qual letters don't mean a heck of a lot) is the same thing as providing the builder with the custom plans for your new home rather than expecting them to just build something based on your general verbal description. Would you object to providing a builder with the plans because it might give him some insight into how much money you can spend? Or would you object to him using the tools required to build the house?
Same thing, really. You're hiring a professional to do a job for you, and then you're doing your dead level best to hamper that professional in the performance of the job. Just who are you hurting the most when you do that?
One question for those of you who object so much to providing a pre-approval letter to your own agent. How many of you sign a buyer's rep agreement - that is, actually hire the agent to represent you - in the course of your search? Or do you, in that, as well, say, "Just trust me on my say-so that I'll use you in the actual purchase of the home after spending your time, money and energy on the search" while refusing to trust the agent with the information they need to do the job the best they can?
Okay, let's look at this another way. If you were building a house, you would naturally put in the foundation first, right? You wouldn't build the roof first, or frame the walls, or put in windows, or put in the kitchen, before you build the foundation.
Getting pre-approved for a loan (not the house approved, YOU approved) at the very beginning of your home search is the same thing as far as the project of purchasing a house is concerned as is starting with installing the foundation when you're building a house. You'd think someone who skipped that first step in building a house was foolish, correct?
Makes perfect sense, but...
Quote:
Likewise, providing your agent with the pre-approval letter (or at least letting them talk to your lender who can confirm for them that you are pre-approved - as said, pre-qual letters don't mean a heck of a lot) is the same thing as providing the builder with the custom plans for your new home rather than expecting them to just build something based on your general verbal description. Would you object to providing a builder with the plans because it might give him some insight into how much money you can spend? Or would you object to him using the tools required to build the house?
Same thing, really. You're hiring a professional to do a job for you, and then you're doing your dead level best to hamper that professional in the performance of the job. Just who are you hurting the most when you do that?
This is where you lose credibility because you've stretched the analogy too far by making too big a leap... Details of my finances are discussed with my accountant and in the case of your example, my mortgage broker. An agent is hired for their expertise on the house side of the equation. There are different professional designations when it comes to finances.
Maybe you're misunderstanding things, but I'm happy to confirm with you (as I did with my current agent) that I have a mortgage broker and a pre qualification for homes in my budget. You don't need to know what my maximum loan amount is in order to properly do your job and to insinuate that you do is disingenuous. Now you may want to know for fear of "wasting time" as other agents have pointed out here - but, that's immaterial in doing your actual job.
Quote:
One question for those of you who object so much to providing a pre-approval letter to your own agent. How many of you sign a buyer's rep agreement - that is, actually hire the agent to represent you - in the course of your search? Or do you, in that, as well, say, "Just trust me on my say-so that I'll use you in the actual purchase of the home after spending your time, money and energy on the search" while refusing to trust the agent with the information they need to do the job the best they can?
Speaking for myself, I sign a BA when I'm comfortable that the agent is a good fit for me. Unfortunately, you can't know that before you start seeing houses and the worst part is that you don't really know who is good or bad until you start negotiations. All agents talk a great game (as proven day in and day out on these boards), but you can't really know until you delve deeply into the process. It's a major shortcoming of the entire process. I would honor the code of whoever shows the property gets the commission - not much choice there IMO. But, I won't sign until I'm sure the agent will truly represent me the way I expect. Early on it's an interview process for me.
Now, you can justifiably argue repeat business. I could potentially come to trust an agent to the level you mention here... But in my most recent move I relocated and did not have a relationship with local agents in my new state. I'm not alone in this as I'm sure you know. So bear in mind that most of my comments are based on this "cold" introduction to local agents. You don't seem to acknowledge that a good chunk of RE moves in situations like mine and there's no way for us to know who's good or bad up front. Plenty of examples of nightmare agent stories out there.
I've never signed an agreement with my buyer's agent. They've never asked. To be frank, their preferred mortgage broker has vetted us. My realtor lives down the street from me, and knows where we work, etc.
We aren't gonna shaft them. Unless we are baldly lying about our ability to get approved (we aren't) our RE has nothing to fear. We require minimal RE agent support, as we are casually shopping. That's also why we aren't doing credit pulls. No need if we don't have to find a house in X days.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
