"I'd be interested to know what sort of 'pre qualification' you expect from a cash buyers."

What I/seller require, is written verification by a bank of readily available funds in the buyers bank account, including bank representatives name and contact information.

Bernie, lose the attitude--it's frequently ugly.

You have no idea how much homework I've done on neighborhoods, comps, financing, etc. The answer is: a lot.

Bernie, lose the attitude--it's frequently ugly.

Mary why is it an attitude or ugly when an agent is giving important information on how things work. What is ugly are tire kicker know it alls who ask but don't want to hear it.

Agents dont' want to waste their time period. There is no salary, no one putting gas in our cars, no one paying our bills except REAL BUYERS and SELLERS. Agents requiring a pre approval letter is for the benefit of the seller, the buyer AND the agent. If you're selling your house, do you want every Tom, Dick and Harry making you go crazy cleaning, getting your kids out, your dogs out, re arranging your dinner schedule for those inconvenient showings for someone who is "just looking?".

IF someone said to me, I have an 800+ credit score, are you having an open house? My first thought is.... tire kicker, because a real buyer wants an appointment to see that house, they arent waiting around for an open house so they don't have to talk with an agent.

Linda - you make wanting to go to an open house sound like a crime.
1) I never told an agent I was asking about an open house my credit score though I would answer any questions a realtor cared to ask. Most don't even return an email - how is that costing anyone but 20 seconds? You already have an email account, doesn't cost you gas.
All I did was ask "are you going to have an open house"
as in - I don't think I'm all that interested in this particular house but
since I'm interested in similar sorts of properties I would like to see it for market situational awareness but NOT WASTE ANYONE"S TIME. Yes, No, hit send.
I feel like I'm some sort of criminal for trying to be nice.
I am likely to buy a house sometime - so shoot me for not buying a house this week.

I'm wondering how the seller would feel if they knew their agent turned away a prospective showing.

My Sellers are told up front that I market to ready, able, and willing buyers. Sellers hate getting those appointments from lookers only. It is a pain in the rear to be a Seller. Especially in this market. I try to bring buyers that are ready now, not six months from now. If the house is still on the market in six months, and you have spoken to a lender, have a pre qualification letter, or a proof of funds letter, then you are ready to look inside the sellers home.
This saves time and heartache for everyone involved... the agent, the seller and the buyer.
For out of town buyers that do not know the area... the first step is to rent a car, and follow my prepared suggested route. Get lost over and over. Pay attention to the feel of each area, the traffic, the amenities, the job sources, etc. then, narrow your search to an area, and then start thinking about individual neighborhoods and homes.
now, for your lack of returned phone calls and emails... this is unacceptable, and like in any business, you just need to move on. Communication is key to me.
Beware. If you find an agent that will haul you around w/o you having a pre qual letter, or a proof of funds letter, it is more than likely an agent that is very new in the business, or one that is bottom feeding. When so much is riding on your financial decision, neither one is what you want.

I'm wondering how the seller would feel if they knew their agent turned away a prospective showing

I know this, they get pretty ticked off if they find out an agent showed their house to someone who is not qualified to buy.

I showed a house twice this past weekend. It was not my listing, the owner was home both times. The second showing, I arrived before the buyer. The owner asked me point blank, how is this person going to buy a house when her husband is in Iraq. Does she have a pre approval letter? He was feeling the inconvenience of the showing. His friend came over to remove his dog, the neighbor had his children and there was an entire entourage of people coming to see his house on a sunday morning. He was less worried about the showing, and more worried about, CAN THEY BUY?

I also got a call on sunday to show a home I had just listed. She sounded very interested on the phone, she was a neighbor, loved her neighborhood, needed something a little bigger. She was very excited. After talking to her about 5 minutes, I asked how her credit was, "oh not that great, Im in the middle of a loan modification, I want this house but if it works it works, im not going to make myself crazy". If it was a simple, I want to make an appointment to see this house, EVERYONES time would have been wasted. Do I think she can buy? Nope. But she is calling the bank today to see BEFORE she gets to see the house.

I hardly think the seller would have wanted this showing yesterday.

ncrealestateguy -- we've been transfered a number of times and usually only have 3 or possibly 4 days in town to find a home. We do all of our research from afar, to narrow down areas and neighborhoods. We talk to the realtor extensively and expect him/her to know the traffic hot spots, to know the schools, to give us an idea of neighborhoods. We do not have time on a househunting weekend to waste our time just driving around becoming familiar with an area and then lining up houses . We usually look at in excess of 30 homes on a weekend - that's where our time is spent. The realtor receives a wants and needs list, communicates with us, we narrow it down and when we get to town, he /she has prepared a list of homes to see. We do get pre qualified before we come into town to actually see homes.

In all of our relocations, the realtor worked really hard, but at the end of 3 or 4 days we bought a home and they had a commission. I would hope that even in a market like this that if we were relocating a realtor would go the extra mile to help us find the right home. I'd be really upset if I had the experiences of the OP.

"Bernie, lose the attitude--it's frequently ugly."

It's just the facts, no emotions involved here.

"In all of our relocations, the realtor worked really hard, but at the end of 3 or 4 days we bought a home and they had a commission. I would hope that even in a market like this that if we were relocating a realtor would go the extra mile to help us find the right home. I'd be really upset if I had the experiences of the OP."

Having worked relos (USAA & others) for many years, I have sold 100's of homes in the 3 or 4 day timeframe when the buyers were in town. Buyers knew when they had to move, where they were going to be working, how much money they were going to make, what price range was in their market, what their minimum size requirement was, which schools/districts their kids should be going to, which subdivisions were in those districts etc.
With that knowledge at hand, I'd drive buyers around every day, without hesitation.
However, I probably wasted over $200k in time and income over the years having buyers who would buy from a FSBO, other agent or the next town over, without me. It's part of this business and I try to minimize my losses.

From reading these posts, it appears that some agents/brokers are weeding out buyers as "tire kickers" that they deem are not serious buyers, so the agent doesn't waste time/money with these uninterested lookers and also so the sellers are not inconvenienced with a wasted showing.

But in this process, it seems that there are some very serious buyers that the agent/broker wrongly marks as "non serious" via the screening process.

"But in this process, it seems that there are some very serious buyers that the agent/broker wrongly marks as "non serious" via the screening process."

And as I pointed out before, when a buyer thinks that their sincerety is being questioned, a retainer fee could easily take care of that.

Cordovamom,
If my clients have 3 or 4 days to find a home to buy, and they let me know that up front, it has been my experience that the first day should be used by them driving the entire town by themselves. Of course, I am sending them out with resources, hot spots to see, and neighborhoods that might interest them.
I do not feel comfortable making the decision as to what part of town (I work in a fairly large city... Charlotte, NC) to sell my relocators on. that has to come from them. If one day is spent by them making that decision, they will feel a lot better when we spend the next 2 or 3 days looking at homes in only areas that they have already decided upon.
Sweet tea, if a buyer is very serious, it is not hard to tell after only a five minute conversation with them. Have I missed out on one or two now and then... probably. But in order to be sucessful, the weeding out process is the first thing you need to master. if not, you waste your time on activities that never produce an income. It is just fact that there are a lot of people that would really like to spend a day driving from home to home, knowing that they can not buy.

nc -- we've been relocated 7 times in the past 32 years -- if a realtor would have had me waste the first day of my trip just driving around, I wouldn't have had him as my realtor!! Those 3 to 4 days are for looking at housing. I've moved to many big cities and have found that finding a realtor that understands my wants and needs, is invaluable. A lazy realtor won't get my money. But one that takes the time to help me with research up front and guides me in an unknown city is worth his/her weight in gold. Maybe those are few and far between right now, I'd hope not.

If my clients have 3 or 4 days to find a home to buy, and they let me know that up front, it has been my experience that the first day should be used by them driving the entire town by themselves

Ewww, I can't imagine how a transferee moving to a new town, state, sometimes country would react to something like this. I think most transferees, depend on their realtor to show them the hot spots, listen to their wants and needs and show them the houses in those areas based on their conversations. Wasting a whole day driving around when they dont know what they are looking at seems counter productive to me.

This is probably the reason most companies have relocation training for agents working with transferring buyers.

Linda you said it better then I could !! You know exactly what I'm talking about.

You two are not hearing what I am saying... By the time my relos are in town, I know what matters to them most. I give them a suggested route, I give them a pamphlet that describes each disitnct characteristics of the areas of the city, they receive a list of over 125 internet links that pertain to a person who is thinking about moving here, and I refer them to a hotel where I will reimburse their costs at closing.
I have done it both ways when I first started RE. I found that I was wasting my clients limited time showing them houses in areas that may not, in the long run, have the criteria and/or the feel that they are looking for. And the only way for THEM to determine that is for THEM to visit these areas the first day. No matter how much up front criteria that I know about them, I do not know how each area will make them feel emotionally. Choosing a place to call home is an emotional choice, not an analytical one.
This process allows us to be much more productive in the remaining days as we know what areas to look at homes and which areas are a waste of time. And they always come back to me the next day, with great stories of their experiences getting to really know the city.
Maybe the fact that Charlotte is of a certain size, that relos come here knowing that it is a small enough city that they can live anywhere and still be close to their employment. In larger cities, most relos probably know, at least, if they want to live on the North, South, East, or West side, before arriving there. Not so here.
You stick to your way and I will mine.

Since my way has worked for 32 years through 7 relocations, I will stick with it. Good luck with your way, it just wouldn't be a good way for me or many other transferees.

By the time my relos are in town, I know what matters to them most

Then why send them out there to drive around looking at things that might not matter? I would take the time to show them the churches, schools, the gym, the library, where they can go grocery shopping, the mall, all while on route to the houses they will be looking at. I hardly think their company paying for their trip, their hotel, rental car etc is for them to go it alone. I haven't done relos in a long time, but I distinctly remember that these people were to be handled with kid gloves and most are pretty demanding. An agent giving a transferee a brochure and sending them on their way would have been the quick route to being taken off the relo list to work with these buyers.

WOW! The claws are out, eh?
Everyone has different wants and expects different things from their realtor.
Hey guess what? My realtor had a co-worker show my house a couple weeks ago. At the time I signed on with her, I STRESSED how I wanted ONLY prequalified buyers- I usually don't feel well, and don't need the physical aggravation of cleaning up the house and going away for a casual looker. This was AGREED upon by the RE agent.
I didn't feel well when the house was being shown, so for the first time I stayed home- I stayed in the garage faking cleaning up the car....
Imagine when the RE person asked me to come out to answer some questions...

The 'buyer' kept asking me about other stuff- how many bags a day did I use for the pellet stove- I explained to her I didn't use the pellet stove (I can't lift anything).
She then went on to ask if I rode the horse that was in the pasture. "No", I answered- I can't ride anymore.
She then goes to the 4 wheeler in parked in the corner of the garage an asked 'how many miles does this have?"
She kept saying how she loved the house, and wanted her mother/father to come out in 2-3 days to see the house.
She said they were buying the house for a neice who was going to be going to the college equine program this fall, and would be bringing several horses- they wanted to 'buy er a house'.
Well, after answering her several more times, that NO- I don't use the pellet stove, and NO, I don't ride that horse out there- SOMETHING CLICKED...!

After waiting a week and a half for the 'parents' to come out, I finally called my RE.
" "GEE- something is wrong here- her phone number isn't an active number... I've tried several times to see why she hasn't called me to show her parents and the phone doesn't work".
Yea Mrs. RE agent- you were showing a Workmans Comp Employee my home!! That person wasn't a real buyer- she was a Work Comp person who wanted in my home to see if she could tell whether or not I am working from home- an office set-up, whatever (my caseworker has called and hinted that 'I MUST be working in this horrid economy'.
The RE did not make sure the buyer had proper documentation for buying as agreed.
I wasted my energy on making the house spotless- which is VERY painful for me.
The RE let a person into my home who had no business there!
If Work Comp wanted to come in to inspect my home to look for evidence of me working, I would have welcomed them in with my lawyer- but nope- the RE agent did it!!

So sorry Work Comp person- I don't work, ride the horse, ride the 4 wheeler or lift bags of pellets.....

Graywings- I am like you- I am SO frustrated with the lack of ethicswith the RE people here too!

In San Antonio, my daughter tried for 3 weeks to look at a house- she would call every-other day trying to get in touch with the listing agent- never got a reply- so she DID buy a more expensive home from another wonderful agent.

And I too would wonder about buying with cash- I have 2 homes now- both paid for with cash....

I hope I don't have as much trouble buying a place as I am selling this one, due to a lazy RE!

There are bad people in every work force- there are lazy nurses that I have worked with that made my jaw drop.

My eyes have been opened by RE agents, I must admit....it takes all kinds

....for all those people that think buyers shouldnt have a pre approval letter BEFORE seeing the house....right out the mouth of a seller.

There is always going to be a situation where "see, this is why...." due to someone's special circumstances. For a story like ilmbg's you will have another story about someone trying to see a house without a pre-approval letter that purchased another house down the street when they were not let into the first house due to that requirement.

Since pre-approval letters are basically worthless, and anyone that plans on mortgaging can get one (and those that never plan on mortgaging will not ever apply for one), as a seller the easiest way to eliminate lookie-loos would be to have an open house the first week on the market. While a giant pain in the fanny for the seller, and always fraught with theft potential (search the forum for recommendations), the OH allows the neighbors, friends, tire-kickers as well as serious buyers to come though and view the house at one time. No more scheming by neighbors to get in the house, semi-serious buyers can view and possibly become serious about purchasing the house, and already serious buyers that like to cover houses as quickly and efficiently as possible (and people will schedule a second look if it meets their needs) can all come through in one shot.

As I understand it, selling is tough right now. I live in a top 5 market and our market has switched to neutral from a seller's market in the last few months. If my top 5 market is now neutral, I cannot imagine that the majority of sellers in markets that are doing worse can put up any sort of barrier to getting people through the door.

There is always going to be a situation where "see, this is why...." due to someone's special circumstances Since pre-approval letters are basically worthless, and anyone that plans on mortgaging can get one

There is nothing special about this circumstance. The seller wants nothing but pre approved buyers coming thru her home. If the agent had done her job, this whole "special circumstance" wouldnt have happened.

Pre approval letters from primary lenders with good reputations are not worthless. They are worth GOLD. What is worthless is a pre qual letter from some fly by night company that says nothing. (they didnt check credit, they didnt check income, they basically say nothing except, so and so wants to buy a house and we'll check it all out later). When an agent presents an offer on one of my listings with a pre qual like this, we have them get a "pre approval" from a primary lender before the sellers will accept their offer. The alternative is taking a chance and having the whole thing blow up 2 months later. The seller has then lost 2 months of marketing time, probably a pretty substantial price loss (because the longer the house stays on the market the lower the price goes)

I cannot imagine that the majority of sellers in markets that are doing worse can put up any sort of barrier to getting people through the door.

The alternative is, sellers driving themselves crazy cleaning, changing schedules, being inconvenienced beyond belief because most buyers in todays market think every seller is desperate, to show the house to someone who can't buy it to begin with.

Perhaps this is regional, but in my area, its pretty routine and offers MUST be submitted with a pre approval letter. NO question.

Pre-approved to view vs pre-approved to present an offer - two different situations.

Having tried to sell in this market, I'm well aware of what sellers go through to prepare. But requiring a pre-approval to view 1) excludes potentially serious buyers who are in the early stage of the process and 2) doesn't necessarily prevent inappropriate, time-wasting showings.

Given the high degree of professionalism of real estate agents, shouldn't a seller trust a buyer's agent not to arrange a showing for someone who is not in a position to buy?

Given the high degree of professionalism of real estate agents, shouldn't a seller trust a buyer's agent not to arrange a showing for someone who is not in a position to buy?

Ahhh yes, what better way to do that then to have them get a pre approval letter before showing them houses?

Perhaps this is regional, but in my area, its pretty routine and offers MUST be submitted with a pre approval letter. NO question.

What about cash buyers?

Maybe it is regional. We looked in Westchester, No. NJ and WNY. In no area, using four different Realtors, did we present a pre-approval letter to see a house. And, this was during the buying frenzy of three - four years ago. We were never asked once by any Realtor for one, and two of those folks had been in the business for a very long time with excellent reputations. Up until we actually applied for a mortgage we were undecided as to whether or not we should pay cash. (If anyone wonders why we looked in three areas, my hubby was working in Manhattan at the time hence, No. NJ and Westchester.)

Xamsx, why does this subject irk you so much? I dont know what others do, but if someone tells me they are a cash buyer, I dont worry much about the pre approval. If, after that they decide to get a mortgage, then the pre approval at that time is fine. I already know they can pay cash, Im not worried about the pre approval letter. Everything is done after a brief conversation with the buyer, you take it on a case by base basis. The majority of buyers are not cash buyers. We are talking in general here. Obviously someone paying cash won't need a pre approval letter, however, when they submit an offer, they will be required to show a proof of funds letter.

If you were a seller that had been on the market for any length of time and were feeling the pressures of selling your home and you were home when an agent showed your house. You knew the people loved it, they were ooing and ahhing all over the place. You got excited thinking, "this is it". you cleaned your house, made arrangements for your kids, your dogs, rescheduled your dinner plans, etc. Two days later, you are still waiting for the offer, nothing. Finally, your agent calls with feedback on "those people". She tells you, oh, they arent qualified to buy a house, they can't get a mortgage, they have bad credit, whatever. Would you feel like it was all worth it, because "you had a showing"?

Any of the pre-approval letters I've ever had or seen did not say anything about how much someone could afford. So yes, it does let you know that they have the credit worthiness for a mortgage, but a buyer could hand a realtor a pre-approval letter and still be viewing a house they can't afford.

So while, I agree that it can be a useful screening tool (people who just want to look and aren't interested in buying probably won't go through the trouble (and a credit pull) to get a pre-approval) there really isn't anything to stop someone who can only afford a $200,000 house from looking at houses that they can't afford.

there really isn't anything to stop someone who can only afford a $200,000 house from looking at houses that they can't afford

Here is what a typical "PRE APPROVAL" letter that I have on a client from a reputable mortgage lender in my area says:

I'm please to tell you that you have obtained a full preapproval instead of a simple pre qualification based on a full review of your credit report and the information you supplied us regarding your income. You are credit approved with no contingency for a Conventional Loan and the stage is set for you to become or continue as a valued BLA BLA BLA mortgage Customer. The details of this approval are as follows:

Total Loan Amount $299,000
Purchase Price $399,000
Property Address: TBD
Credit Approval Date: 9/18/2008
Credit Approval Expiration: 12/18/2008

This credit appproval is NOT A LOAN COMMITMENT. A committment letter containing the terms and conditon of your loan approval will be forwaded to you by our mortgage specialiist. Your loan approval will also be subject to the identification of a property and an acceptable appraisal report reviewed by the lender.

I should have put this all on one post. Here is a pre approval that isnt worth the paper its written on.

Congratulations! The purpose of this letter is to inform you that you have been Pre Approved for the following mortgage transaction:

Purchase Price 185,500
Loan Amount 179,000
Loan Type: 30 Year Fixed

This pre approval is based on a satisfactory verficiation of the information that you have provided to me during our telephone converastion and a complete credit report.

Once again, congratulations! Please do not hesistate to contact me with questions.

These were first time homebuyers who got ripped off. This "broker" charged them $350 to give them a pre approval letter and did nothing.

I'd just like to point out that ncrealestateguy's advice about driving around in a rental car is actually very good advice for relocators.
We moved to Cary, NC in 2003. It is a big, sprawling place. It's possible to type Cary NC into realtor.com and find two homes that are over 20 miles apart and require you to LEAVE Cary and drive thru 2 or 3 neighboring towns before arriving back in Cary.
On our second visit to the area, after we had been shown a few properties in one corner of town, we drove around for 2 days, putting over 500 miles on the rental car without leaving Wake County. We drove to the mall. We drove to the Y. We drove to the airport. We drove downtown. We drove the entire 440 loop in both directions. We got more out of those two days on our own without the influence of a realtor than we could have imagined, and those two days helped us to rethink which locations would really suit us.
Agents really want to sell houses, but they need to do what they deem necessary to best use whatever time they invest in a client relationship. The truth is that lending standards are tight, houses are not appraising, and people are unable to sell their existing homes. It's not easy to sell. It's not easy to buy. And, it's not easy to be an agent and try to do right by a client in the current environment.

xamxas wrote:

"I cannot imagine that the majority of sellers in markets that are doing worse can put up any sort of barrier to getting people through the door."

When selling a house, you do not want people coming through the door, you want buyers that are ready, able, and willing coming through the door. A big difference.
The only way for agents, and the buyers themselves, to know the status of their financing power is to speak with a lender. And of course, if you are a cash buyer, then have the bank print off on letterhead a "proof of funds letter. If you are a serious byer, these steps are minimal. And as a financing buyer, why would you NOT want to know for sure what you can or can not do as far as financing?

trk65, I am glad this process worked well for you. it works every time for my clients too. deciding on an area to call home is an emotional one, one that is best discovered not surfing the internet, or hoping your REA knows your every emotional whim after a couple conversations over the phone, but by adventuring out on your own.
trk65, I appreciate the fact that you realize that an agent has to use their time in the most productive manner as possible. However, the reason that I prefer relocators to venture out on their own first, is foremost because I know, that even if they disagree with me at first, it is in their best interest to do so.

When selling a house, you do not want people coming through the door, you want buyers that are ready, able, and willing coming through the door. A big difference.
The only way for agents, and the buyers themselves, to know the status of their financing power is to speak with a lender. And of course, if you are a cash buyer, then have the bank print off on letterhead a "proof of funds letter. If you are a serious byer, these steps are minimal. And as a financing buyer, why would you NOT want to know for sure what you can or can not do as far as financing?

In this day and age, you can find out your borrowing power with a few clicks on the internet. I know my credit score, I know how much I can borrow. Yet until this is blessed by a lender, you won't let me view your house???? In the situation I am in, that would be your loss.

I should add that when I traveled to the area I plan to move to, I carried copies of my W-2s and other financial documents that would have demonstrated my ability to get financing. To my mind, there are other ways to prove your readiness than to be pre-approved by a lender.

With rates fluctuating daily, how do I know that bank X that gave me the pre-approval is going to be the best deal two months later when I have found a house and want to obtain a mortgage? Do banks pre-approve you free of charge?

I will never tell an unknown Realtor how much I can afford to buy. Once they know, they always push for the max and that is not necessarily what I want to do. My time is worth a lot, so I would not be wasting my time, hence not Realtor's time either.

"I will never tell an unknown Realtor how much I can afford to buy."

As an agent I don't care what buyers can afford to buy, but what they want to buy.
A few times I found buyers to be liars and they wasted my and their time.

graywings,
Please point me to the website that can tell you your buying power w/o being pre qualified.
Just because you know your credit score doesn't mean you know your maximum for financing. It also does not tell you your interest rate. it also does not tell you your terms.
I know plenty of people with great scores, but have are unable to finance due to poor debt to income ratio, have filed banruptcy w/in the last two years, changed careers w/in the last two years, have to sell their current house first, the list goes on.
Carrying around W-2s has NOTHING to do with your ability to find good financing. Like I just said, I know plenty of people that make a ton of money, but can not finance a home for a multitude of reasons.
Pre approvals are free to get, and uaually are good for 30 days. The preapproval is not an application for a loan, so you are not locked in to that current rate. In fact, you are not obligated to even use that particular lender.
Anyhow, if you are months away from buying a home, then you are not what sellers consider a buyer yet.

Punamytsike... How is a realtor able to convince someone to buy a $200,000 house if you only want to spend $150,000? Are you really that weak minded? I don't think so.

Question is not about convincing, question is that they will try to only show houses in upper price range.

I am currently working with realtors that I have known for years and they do not need any paperwork from me to show what I want to see. But if I would start looking in a new area, I would not work with anyone who requires me to show them my financials before they show me property. But that's just me :)

ncrealestateguy, you are simply being argumentative at this point because I am sure you are aware of the various calculators on line to determine borrowing power.

Are you really saying that if I walk into your office with, as I wrote, my W-2s and other financial documents that would have demonstrated my ability to get financing which includes proof of my 800 credit score, you are not going to take my business for lack of a loan pre-approval???

Perhaps I am wrong, but I would think that a stellar credit score precludes most of the problem issues you mentioned. Or am I incorrect?

I don't need to know my exact maximum borrowing power. I don't want a house that costs that much.

Graywings,
Those calculators are not going to type you out a pre qualification letter.It's not the fact that I may suspect that you do not have the ability to get a loan, but it shows to me that you are not at the stage to be considered a real buyer. All offers that are submitted must have a pre qualification letter, or they go nowhere. What seller is going to waste their time with someone who hasn't even taken the time to speak with a lender? Not many.
If you tell me that you are willing to get a pre qual the next day or so, I may take you out, because it shows me that you are a ready buyer.
And, no, a good credit score has nothing to do with your debt to income ratio.
Chances are, you are a stellar candidate, but especially in this financial market, one may never guess.

punamytsike, I do not want to see your personal financials, that is between you and your lender. I just need to see a pre qualification letter. Wouldn't you feel better having one too? You are able to write up an offer right on the front porch of your dream home and submit it within minutes, as opposed to waiting for one or two days. And you know up front what interest rate you can get, what the closing costs are, and what the estimated monthly payment will be. What if you want to ask for the sellers to pay for your closing costs in your offer? Without speaking to a lender, you do not even know how much to ask for. It is just a better experience for the agent and especially for the buyer to not put the cart in front of the horse.

ncrealestateguy, we seem to be from a very different world. I am not sure if this will add to the value of this general discussion but I will reply:

I will never make an offer after viewing a house 1st time, on the porch. I will go back and do my due diligence before making an offer. If I would be financing the purchase, I would have made the arrangements and would know how much house I can buy, but I would not feel the need to divulge this information to my Realtor. I do not need the agent to help me get the best deal, I know how to do that myself. Too frequently I need the agent to open the door, so I can see the property because it is listed with an agent and you need one to see it.

punamytsike,
If you are working with an agent that agrees to haul you around w/o knowing that you can get financing, then chances are you are either working with an agent that is new to the business, or very hungry.
But since you only need an agent that is capable of opening doors for you, then all is well.

ncrealestate guy: Of course the calculator won't produce a letter. My point is that use of the calculator combined with my W-2s and other financial documents that would have demonstrated my ability to get financing which includes proof of my 800 credit score should be enough proof of my ability to buy to get me into a house to view it. And the fact that I called an agent five days in advance and traveled 100 miles should be enough to demonstrate that I'm more than a looky-lou.

What seller is going to waste their time with someone who hasn't even taken the time to speak with a lender? Not many.

I just went through the selling process, so I know this side of things very well. If I found out my agent held your point of view, I would fire him.

Given the high degree of professionalism of real estate agents, shouldn't a seller trust a buyer's agent not to arrange a showing for someone who is not in a position to buy?

Graywings you said this further up in the thread. I'm just trying to understand your view point. In your opinion, if a buyers agent supposed to make sure a person can buy without the pre approval letter? The pre approval letter has less personal information than a W2. Im amazed that you are against getting a pre approval letter but you'll share your W2s and financial documents.

LOL, i guess i forgot the other half of that question. It should read, if a buyers agent is supposed to make sure their buyer is a qualified buyer. How do they do that without a pre approval letter?

I think someone needs to poll folks that own a home and ask if they had a prequalification letter prior to LOOKING at homes to buy.

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In my case, for one of the homes I bought, I was casually looking around for a couple months via drive by and internet. Then I found a home that seemed perfect in the newspaper and called the listing agent and arranged for a showing on the same day, a weekend day. The agent set up the appointment for a couple hours later and even had to drive an hour to meet us there. We made an offer right at the showing and we ended up competing against 3 other offers, and we ended up buying the place as the higest bidder and we closed within 3 weeks. The listing agent got commission on both ends of the deal. Thank goodness the agent did not require a prequal letter ahead of time, else the seller could have sold to one of the other bidders during that weekend that all the offers came through, and likely the seller would have lost out on several thousand dollars.Plus the agent wouldn't have gotten commission at both ends of the deal, as the other bidders had agents of their own.

Sweet tea -- I don't recall on the first 3 homes I purchased, but yes we did have a pre qual on the last 4. But, I've never required a pre qual on anyone viewing my home. Although any offers did have to be accompanied by a pre qual. I do think that if any of my homes would have been on the market for a substantial amount of time I would have got pretty tired of keeping the house clean and available for lookie loos and in that case might have become pickier about who I allowed to access my home. But all of my homes sold quickly and if there were a few lookie loos that came through it didn't matter.

I have never had to provide any prequalification anything, letter or otherwise, prior to looking at homes or land. I have purchased homes in at least six states that I can think of at the moment, plus looked at homes and land in a couple of others.

That said, an astute real estate agent will informally determine if someone she is working with is qualified or not. If nothing else, it keeps the agent from wasting her time. Listing agents sometimes say they will qualify buyers prior to showing the property. I have always taken that to mean informally, not through any precertification or letter of credit.

An exception may be for very, very expensive homes, especially those belonging to celebrities. There are special security issues with those kind of homes, and opportunists trying to gain entry need to be filtered out.

In the olden days, a bank wouldn't talk to you about a mortgage until you had written a contract. The real estate agent pre-qualified you.

I have never been asked for any sort of prequalification letter to view homes.

I imagine just as realators assess people to weed out potential lookie loos they also assess how probing they need to get on finances and whether they feel the need for a pre-qual or not.
( I do think there is a difference btw a lookie loo and a tire kicker)

And how hard and fast a pre-qual requirement is probably varies region and location. In bigger more populated areas or areas growing at a really fast rate its tougher to make assessments
( perhaps we could call this real estate profiling :)

Smaller cities in the midwest probably go by different variables, have a different culture, and don't ask as much because they know more about the people there, what the different places to work pay etc.

In my area(s), "why did you move here?" "To work at the base" equates to a couple of questions about how much I want to spend, down payment, do I need a recommendation for somewhere to finance and we are off and looking.
Ive only been asked for a letter when there was a strong possibility of submitting an offer, but even that was 50-50.
I imagine its the same for officers, older career enlisted. The younger E-3s that wander in with a baby in their arms probably get asked more questions about their finances.

In your opinion, if a buyers agent supposed to make sure a person can buy without the pre approval letter? How do they do that without a pre approval letter? The pre approval letter has less personal information than a W2. Im amazed that you are against getting a pre approval letter but you'll share your W2s and financial documents.?

An agent such as ncrealestateguy who won't show a house without a pre-approval letter is doing everyone a disservice - buyers, sellers and him/herself. Especially himself, because as someone just beginning to search for a house, if I were met with that response, I would take my business elsewhere.

I think that agents see the house buying experience quite differently than buyers do. As a buyer, I know generally how much I can afford (from the on-line calculator), and my focus is on locating the house, not the details of the sale. Not at that point.

Here is an example in another field: a bathroom remodeling company in my area won't let you into their showroom without first having come to your house to measure. It makes perfect sense to them, but as a prospective buyer of that service, it was such a turn off that I went to another company.

Linda, regarding showing my W-2 to an agent I want to work with, I'm not being secretive or trying to hide my financials. It is the real estate industry's requirement of the interim step of a bank pre-approval that I am arguing against. It seems a waste of time since I would want to shop the rates among various mortgage companies after I find a house and need financing. So, the prequalification doesn't help me at all. It is hoop that agents are making buyers jump through.

If I e-mailed you explaining my circumstances, made an appointment, and then walked into your office with my W-2, a piece of paper showing my 800 FICO score, and my driver's license, why wouldn't that be sufficient for you to get me into a house that I had already researched on the internet?