Positive Real Estate Professionals

This is by far one of the best articles I have come across in a long time that really spells out the need for buyers to get a pre-qualification letter as a first step in finding the home that fits perfectly for their situation. In today’s market, when gas is expensive, realtor safety is always a concern, and setting realistic expectations for buyers is more important than ever,  it only makes sense to help buyers maximize their home search. Debbie goes into many of the reasons why this is important. Her article is not meant to discourage any qualified buyer. It is I believe meant to help both buyer and realtor to know what type of house they should be looking for. I am sure you will enjoy this article from one of the most successful realtors in Virginia.

Via Debbie Malone RE/MAX 1st Olympic:

Pre-qualification- When you prequalify for a mortgage, the lender calculates the approximate amount you’d be able to borrow, based on your current income and debt.

Simple right?

Then why don’t buyers understanding this is the first step in the home buying process? Not going through the Sunday Real Estate section and picking out pretty houses they want to see. And, why are agents moonlighting as tour directors? I do have better things to do with my time- really, I do. If you’re serious about buying a home get pre-qualified before you start viewing homes. Agents, if you’re opening doors for just anyone you need to stop.

So Deb, tell us how you really feel.

I received another call on one of my foreclosure listings. After answering several questions about the condition and size, I told the caller the usual info: sold as is, bank would not pay closing costs, they require a pre-qual to accompany all offers. The caller told me they had been looking at homes for several months and wanted to see this one. They aren’t working with an agent, great.

I asked which lender had pre-qualified her. “Oh, we haven’t been pre-qualified yet.” Let me understand this, you’ve been looking at homes, with an agent, and no one has pre-qualified you? NO. Well then, how would do you know the loan amount you’ll be approved for without speaking to a lender? “We’ll get pre-qualified before we make an offer. When can we see it?” Hold on…. I need to explain a few things first:

1. I don’t just run over to a listing and open the door for you. I meet with you at the office, get some information and then we set up the showing appointment.
   
2. I don’t show homes without you first meeting with a lender and producing a pre-qualification letter. (Thank you Judi for teaching me that early on in my career.)
   
3. Not keen on that? You are welcome to call any agent you would like. They’ll be able to get you into the home and I hope it works for you.
   

We all know pre-qualification is just the first step in the home buying process. And I’ve had committment from the loan officer only to received a call a week before closing telling me the loan’s been denied in underwriting. But, times aren’t so desperate that you’re going to run me ragged showing you houses you can’t afford. It’s not fair to a seller to set up an appointment and get their hopes up, then show their home to someone who cannot afford to buy it. I don’t work that way. Miffed? I’m sure there’s an agent out there ready to let you in, but it’s not me. Buh-Bye now.

From the Free Dictionary:

Prequalification. When you prequalify for a mortgage, the lender calculates the approximate amount you’d be able to borrow, based on your current income and debt.

Many lenders offer free mortgage calculators — sometimes called prequalification calculators — on their websites to help you estimate how large a mortgage you’d be approved for.

Since you don’t complete a mortgage application or provide financial details, prequalification is not a guarantee, and simply helps you determine how much you should plan to spend on a home. But before you’re approved for a mortgage, you’ll have to go through the mortgage application process, including a credit check, and provide financial documentation.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.