RealTown's RealTalk

It seems anytime I get hesitation or some ( even plausible) sounding excuse for delaying getting preapproved; there’s an issue regarding motivation.

Having said that, I’ve had buyers who have gotten preapproved twice sometimes during the previewing process & ended up not buying.

I am generally pretty good in spotting red flags regarding buyers getting preapproved ( relates to motivation IMHO) but I believe in communication being key to getting what one wants………or walking away with a clarity of opinion.

Are these successful dialogues / questions that can help really sift the real issues why a buyer won’t get preapproved?

I usually tell them that it will save them time & effort ……..knowing exactly how much they can ‘comfortably’ afford to spend will allow them to focus on only the most suitable homes & avoid any emotional confusion or disappointment ( so that they don’t fall in love with a home out of their range)

That just using a mortgage calculator won’t give them a clear picture of their individual financial affordability.

That they are prepared to make a decision when they do find the right home.

My question also relates to the market shift…………in our area we are doing OK with buyers under $600K …..if the homes they are previewing are under 10 yrs & in move-in condition…there are multiple offer situations, so timing & preparedness is important but the market is not like it was 2 yrs ago………with anything & everything selling….and selling quickly.

So , what are the best strategies in working with a motivated buyer & not wasting my time showing ANYONE homes if they are not motivated to buy?

BTW, for those familiar with my buyer attorney question to this board………………They claimed they were too busy to get a preapproval ( left it till the last day blah blah)………guess what, haven’t heard back after one afternoon of showing them homes.

A memorial day weekend family ( 2 small kids) was another mistake……….( he was going to bring it with him )

As a matter of practice, I don’t show homes if I know they are not preapproved…………..any better dialogues for handling questions/objections regarding how to make them see WIIFT …….would be much appreciated.

Thanks

mailto:Shalu@Thaman.com

As a matter of practice, I don't show homes if I know they are not preapproved..any better dialogues for handling questions/objections regarding how to make them see WIIFT would be much appreciated.

Regarding having buyers pre-approved before showing them homes, I have found in general that many buyers are unclear about what they can afford (either they falsely think they can afford too high a priced home, or they are unaware they may qualify for more than they think). I generally recall some past stories of former buyers and offer these as a reason why it is a great idea to meet with the lender so as to be sure we are looking at homes that they can indeed buy.

Dave Johnston wrote:  Yes, most of my Buyers as well as my self find it demeaning and insulting to be asked to be preapproved.  I have never been preapproved nor have any of my Buyers and I have never lost a deal because of financing.  In my opinion, preapproval is for kids and the lower end of the market.

I guess this is somewhat like not liking to receive phone calls at home in the evening from “salespeople” so we don’t make calls in the evening

ourselves.  In other words, it seems like what we often do in this business is dictated a bit (a lot!) by our own likes, quirks, etc.

BUT dang, don’t you ever have multiple offer situations, where a seller chooses some other agent’s offer because their buyer was “preapproved” and had a preapproval (not “pre-qualified”) letter attached to the offer? After 25 years in this business, and still learning something new about it all the

time, the more dialogues I can learn the better job I do of helping my clients. I also teach many classes to newer agents, and I always try to help them

see that it is better if they try to show their buyer the benefit of being preapproved.

And, yes, I at times have the buyer who states “Oh, I won’t have any trouble getting a loan. I’ll go to the mortgage company/bank when we find the

right house!” The benefit to this buyer of being preapproved is that “it puts me in a better position to negotiate the best price and terms when we

DO find the right house….you DO want the best price and terms, DON’T you mister buyer??”

And then what about the “buyer” in Mr. Johnston’s “upper end of the market” who plans to pay cash? Does the listing agent not want verification of

funds to close BEFORE he lets his seller accept contracts, take the house off the market, etc.? You bet, I do ask my buyer for written verifivation

before we spend time together. Sorry, this is my profession, and yes, I don’t want to work with non qualified buyers. But it IS also in their

best interest to be preapproved, or bring the written verification of funds. IN my market, listing agents will not take a buyer seriously without these

things, and quite often buyers are losing out in the multiple offer situation if they do not have these attached to the offer.

Just a few thoughts!

Jere Whitehouse, Associate Broker

ABR, CRS, SRES

RE/MAX of Montgomery

Montgomery, AL 36117

Jere@JereWhitehouse.com

www.JereWhitehouse.com

Do you consider $500-$600 K to be lower end?

 In our area most 1^st time home buyers are in this price range & have not been through the purchase process & may not realize how their loan-income ratios are crucial to their ability to comfortably make those payments………personally I feel it is also unconscionable for me not to know their financial ability to buy something & show them homes…….it is a lose lose for everyone involved if they fall in love with a home & it turns out they can’t buy it because I did not do my job in preparing them for what was needed in terms of prep work.

Secondly, I am a professional……why would I waste my time and someone else’s showing homes , never knowing if they had the ability to buy or not?

It is also about setting expectations & initiating a relationship, with ME as the expert.

Whether it’s a $100K buyer, a prospective tenant or a $1M+ buyer……if I don’t know they have the ability to purchase…..a verbal assurance is BS in my experience.

I work in an area of well educated, professionals who are internet savvy & if I lack the confidence to prequalify them before I start showing them homes…….then to them……….I am just the average grubby real estate agent quite akin to a used car salesman………and there are quite a few here, unfortunately, who are what I call ,“ pop-up agents” …….they get an email/call……. whatever………and they pop up & are out the door to sell something…………..without any prequalifying of any sort. ( I have since left that office )

FYI, I just sold a $900K home to a buyer in 2 trips of showing homes………he is an executive in NYC……nobody felt demeaned & I already have 2 referrals from this guy……..because he saw me as an expert ( he told me he was impressed by my local market knowledge & attention to detail)………..Yes, I had him preapproved.

mailto:Shalu@Thaman.com