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When you say you have "no confidence in your Realtor" but that they were the only one who would take the listing - RED FLAG- RED FLAG - RED FLAG. What was the reason you could only get one Realtor to take your listing?
Would love to hear that too.
Many times when this happens it's because sellers do not want to be realistic about the current market value of their home.
Realtors won't take the listing because it would be a waste of their time and money.
Why would the Realtor care what a homeowner can afford? It's not the realtor's responsibility to make sure his client can pay his bills after they find the client a house. If they have problems with that they should pay a competant financial advisor to help them.
Have you read any of the thread before asking this? That question has been answered multiple times. An agent who does not care whether or not the person they helping find a home (and there's a LOT more to that than just opening doors or driving around) can afford to purchase the home in the first place and will show anyone anything just because is an agent who is desperate for clients rather than one who, because of experience and referrals, can choose who to work with. If that's the kind of agent you choose, rather than one who knows the procedure and requires that you do your part in following it, you're pretty much getting what you ask for and deserve.
Think of it as a test: is this client going to be one that is worth working with, not because of the money, but because of how invested they are in the process and how much of a pain they are or are not going to be. If a buyer is resistant to complying with something as basic as getting pre-qualified, that's an indicator of trouble to come.
Then you run into people like me who have the money but not a shiny, official 'pre-approval' letter. The two banks I deal with don't work like that. They need to have an address to put down on paper before they give any kind of approval and I'm not having them write me up something for a house I haven't even walked into yet. If I run across someone who requires to see a letter I just tell them that, yes, I'm as pre-whatevered as I can be with my bank. If you still don't want to show me the house then too bad.
Makes sense to me! The banks are the lenders and should take the responsibilty to know what property they are investing in rather just handing out an approval letter for the salesperson to use. I am concerned that the loop is too small when there isn't enough of a separation between the sales industry, lenders, appraisers, and inspectors. Our government is supposed to have checks and balances and the same should be true for the real estate market. It will be interesting to see the effect new REITs have on the market place regarding financing.
Have you read any of the thread before asking this? That question has been answered multiple times. An agent who does not care whether or not the person they helping find a home (and there's a LOT more to that than just opening doors or driving around) can afford to purchase the home in the first place and will show anyone anything just because is an agent who is desperate for clients rather than one who, because of experience and referrals, can choose who to work with. If that's the kind of agent you choose, rather than one who knows the procedure and requires that you do your part in following it, you're pretty much getting what you ask for and deserve.
Think of it as a test: is this client going to be one that is worth working with, not because of the money, but because of how invested they are in the process and how much of a pain they are or are not going to be. If a buyer is resistant to complying with something as basic as getting pre-qualified, that's an indicator of trouble to come.
When you are with a client do you have a copy of the person's credit report? Their pay stubs, their tax returns? Do you know exactly what their other expenses are, what their car payment is, what their medical bills are? If the agent does not have that information they are not in a position to give any informed financial advice about what they can afford or not afford.
Those judgement are the sole responsibility of the consumer and his financial advisor etc etc if he has one.
When you are with a client do you have a copy of the person's credit report? Their pay stubs, their tax returns? Do you know exactly what their other expenses are, what their car payment is, what their medical bills are? If the agent does not have that information they are not in a position to give any informed financial advice about what they can afford or not afford.
Those judgement are the sole responsibility of the consumer and his financial advisor etc etc if he has one.
That wasn't the point of THL's post. If a lender has reviewed the buyer's financial info and provided an approval letter, then they've done the financial background work for us. We then know they are qualified up to a certain amount. The assumption is the buyer can afford that amount (or at least qualify to get a loan for it). Whether or not buying a home for that amount is a good use of their financial resources is not up to us to decide.
I don't want my realtor knowing I 'qualify' for a 1.6 million dollar house when my budget is $600k. Even when I told her $650k max, we wound up looking at houses up to $800k (which is what we eventually bought). Can you imagine if she knew the real number?
And I don't want the buyer to know that I can afford to pay more than I offered because what the heck would be their motivation to move down? So when we sent our letter from our lender with the offer, it specifically said the exact price of the offer. It took like three seconds to get that letter to have it ready to submit with the offer.
It's no one's business how much you can actually afford, it tosses way too much bias into the equation, and frankly, how much you can 'afford' on a letter may not match what you really can spend and afford in reality.
Window shoppers often do wind up buying things, btw...which is why there are so many nice displays in the windows in the first place. A friend of mine wandered over to the Porsche dealership the other day after having some Indian food (it was nearby) and drove off with a Porsche she had no original intention of buying. Things like that happen all the time. I bought my last watch because I was bored while waiting for a friend and wandering around the shop at the Bellagio - had no intention of buying a watch...but if the lady in the store hadn't spent the time and pulled out all the stuff I wanted to look at, she wouldn't have made the random sale.
I got my dog randomly (best purchase of my life), one of my cars randomly (I actually have several friends who have bought vehicles just because they stumbled upon them and liked them), my favorite painting randomly while wandering around Hawaii...
Selling is often part of opportunity. You want to limit your opportunities? Fine. It just seems counter to the whole point of selling.
And I see no point in putting so much stock in a letter than can clearly be totally faked.
You are NOT in the minority, but it seems there are a lot of sales people out there who wish they could make a career change. A home seller should have the ability to set their own terms and accept any consequence and so should the buyer, but neither like being bullied. As a buyer or seller, I have every right to know and look at what is available in the competive market place and not be restricted by someone's "rules" which are not law.
Makes sense to me! The banks are the lenders and should take the responsibilty to know what property they are investing in rather just handing out an approval letter for the salesperson to use. I am concerned that the loop is too small when there isn't enough of a separation between the sales industry, lenders, appraisers, and inspectors. Our government is supposed to have checks and balances and the same should be true for the real estate market. It will be interesting to see the effect new REITs have on the market place regarding financing.
The approval letters almost always (always, in all that I've seen) specify as one of the conditions for final approval that the house qualify for the loan, as well. The pre-approval qualifies the borrower. So banks and mortgage lenders, all of which, to my knowledge, provide such letters for those who do, indeed, qualify for them.
Agents do NOT get all of the financial details that go into determining whether a client is approved or not. Don't get 'em, don't want 'em. DO want verification from a lender that this person has provided sufficient information to the bank to verify that they qualify to purchase a home in the price range they're shopping in. I'm guessing you've never seen a pre-approval letter, correct?
I'm thinking of a time back about 15 years ago when we were going to purchase a new place (well, 100 years old, but new to us). I walked in to the mortgage lender, and she pulled out her form, and I handed her the three sheets of financial information that I had already prepared, because we had refinanced our home a couple of years previously and I knew what information they'd need, she looked at it and put her form back in the desk and said, "I'll just fill this out later." Our agent (I wasn't an agent at the time) said that our deal, 3 weeks from contract to close on a farm and ranch deal, was the fastest he'd ever seen that wasn't cash in his very long career, and that was because we did what needed to be done and didn't make a fuss about the necessity - in other words, we didn't make it harder on everyone around us and ourselves by digging in our heels and saying, "Won't! You're not my mommy! Can't make me!" Only thing that slowed it down was that they were concerned that we fell outside of their parameters because we didn't have enough other debt.
Food for thought. Just whose nose are you cutting off to spite whose face, here?
I have no confidence in our realtor (but was the only one who'd take the listing--but that's another issue).
THIS is your problem. Not prequalification letters. I'm curious as to WHY no realtor would take your listing? That sends up HUGE red flags either about your house, you (no offense - but it's got to be considered) and the realtor that DID take it.
THIS is your problem. Not prequalification letters. I'm curious as to WHY no realtor would take your listing? That sends up HUGE red flags either about your house, you (no offense - but it's got to be considered) and the realtor that DID take it.
I was thinking that earlier.
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