Do all realtors in the USA require buyers to be pre-approved for a mortgage before even considering helping someone look at houses? It seems a bit extreme to have to divulge all of your financial information just to see a house on sale!
Also this seems like a way to manipulate what they show you in attempt to get you to buy the most expensive home one can afford and to pay the highest price possible... is this a local thing or is all of the USA the same?
2007-06-12 23:09:57 · 9 answers · asked by Traveler 4 in Business & Finance ➔ Renting & Real Estate
It's common for a realtor to want their buyers to be pre-qualified. There are several reasons for this.
First off, it weeds out the "Looky Lous" who are just wasting time and have no intention of buying. Some are just passing time, others are looking for decorating ideas and some simply could never qualify for any mortgage.
It helps the realtor in deciding what the buyer might be able to afford. It makes no sense showing $500,000 homes to someone who is pre-qualified for a $300,000 mortgage unless they buyer also has $200,000 in cash for a down payment.
While some realtors will try to show homes at the upper range of affordability for the buyer, the buyer needs to take charge of the process and refuse to view homes that are outside the buyer's personal range. It's not a good idea to buy at the upper limit of what you qualify for unless you know FOR SURE that your income is set to increase significantly in the short term. Savvy buyers know this and will refuse to view a place that costs more than what they're comfortable with.
The buyer doesn't need to divulge all of their finances to the realtor and generally should not. The do need to divulge this to a potential lender, however, and based upon this they can tell the realtor that they are pre-qualified for a mortgage of "X" dollars and have "Y" dollars for down payment and closing costs.
2007-06-13 00:25:35 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 1⤋
Not all realtors REQUIRE it, but it's a fairly common practice, and there are reasons for doing so. Personally, I send clients to a mortgage lender FIRST so that they get an idea of what they can afford and what price range we should be looking at.
There is nothing more sad than not prequalifying a buyer into the correct price range, and then having them realize the houses at which they looked they cannot afford. Once buyers have seen the 'good stuff', and have to drop a few price ranges, they are generally dissatisfied with whatever they look at.
Assuming your realtor is honest and fair, he's not going to try to get you to buy the highest priced home possible. He just wants to not waste YOUR time AND his time showing you properties in the incorrect price ranges.
2007-06-12 23:16:01 · answer #2 · answered by acermill 7 · 0⤊ 1⤋
You do not have to use a Realtor as your selling agent, however, realize that agents representing buyers may bring a qualified candidate, and will be expecting some type of compensation, usually at least 2.4 depending on your market. Will you be able to advertise on the level that a selling Realtor could, or do you already have someone in mind?
2016-05-19 00:24:36 · answer #3 · answered by ? 3 · 0⤊ 0⤋
They do not all require your personal information, but they would not be doing their job very well if they did not at least ask if you have been pre-approved for a home and in what price range. It is not their goal to sell you the most expensive home, it is their goal to sell you the home you want and hopefully do a good enough job at it so you tell your friends about him/her. Their business is based on referrals.
Think about it, if you were selling something and a potential buyer came to you and either had no intention of buying or was unable to buy - would that be good use of your time, money and energy to spend it with them explaining things and putting them in your car and driving them around and then they don't buy or can't buy?
Additionally, if you do not know what you are qualified for you are going to possibly be out there with Champagne tastes on a beer budget and be disappointed it what you can obtain without knowing up front.
I am going to also say, work with a local lender that you can go face to face with - there are many very good mortgage bankers and brokers in each town. Ask family and friends for a referral. That way you get someone that is familiar with your market. As much as I love the internet, I don't think it is the place to find a lender or a realtor - use someone in your neighborhood and you will get overall better service in my opinion.
2007-06-13 01:48:24 · answer #4 · answered by mrsfoster 2 · 0⤊ 2⤋
No, your personal financial information is neither a requirement or a law. You have the option of moving on to the next realtor and that person will most likely show you homes. You can get pre-qualified over the web at any mortgage calculator site to get an idea of what you can afford. However, no matter what I would not recommend anyone that is not rich/wealthy purchase a home that is priced more than twice their yearly salary.
2007-06-13 00:36:49 · answer #5 · answered by Nancy 4 · 0⤊ 1⤋
A buyer agent is irresponsible not to know that is client is financially capable. He is being a fool with his own time if he has not confimred that, of course...but it is about professionalism. The buyer needs to be shown homes he can afford, or dissapointment will result. The sellers expects that qualified buyers are being taken through their homes.
I can tell you that I have won multiple offer battles (and it helped my buyer get the house over another agent's) because I could tell the listing agent that I knew my buyers finances with certainty, and the could count on my word for that. You can't do that if you are in the dark.
A good buyer broker is someone you trust completely to do what is in your best interest. If that kind of confidence is not a certainty in your mind, you are working with the wrong buyer agent.
I remember one buyer who told me we were to meet to look at homes late Saturday, after he picked up his new car. Lucky he happened to mention that. If I had not explained to him he had to cancel the car to buy the house, he would not have not have been able to buy the home we found (nor have made 400K on it over five years).
Your broker an you should a be a team that has no secrets. If you feel you can't trust your broker completely, find a broker you can trust. John Herman
2007-06-13 11:06:49 · answer #6 · answered by John, a REAL Buyer Broker 2 · 0⤊ 0⤋
It depends on the realtor...Ive had some that ask right up front if youve been approved or not, you have to remember that they work on commission so they dont want to waste their time for a couple of weeks on someone who might not be able to buy a house. Some are willing to help you look around but most will want to make sure eventually that you are able to be approved. Also the person selling the house likes to know that the potential buyer is approved so in case he takes his house off the market if you want it, he will not lose pontential buyers that ARE aprroved while he waits to see whether or not you can be approved.
2007-06-12 23:16:51 · answer #7 · answered by sweetgirl 4 · 0⤊ 1⤋
No...your financial info is only required by your lender. The realtor does not need to know this info
2007-06-12 23:13:35 · answer #8 · answered by Anonymous · 1⤊ 2⤋
I think they all do it.
2007-06-12 23:12:40 · answer #9 · answered by Kevin J Davis 3 · 0⤊ 1⤋