Why you need to speak to a lender before you start house hunting

Some buyers just don’t understand just how important this is. It is truly one of the most important things a home buyer can do before contacting a Realtor to be their buyer agent. Some buyers get offended when a real estate agent asks them if they have contacted a lender. This shows the lack of understanding of how the process works. A Realtor is not pressuring you when they ask about your talk with your lender. They are actually doing you a service and doing their job. A buyer should actually be more worried if the buyer broker doesn’t ask this question.

It is the buyer agent’s job to be sure you can afford the homes you are looking at

When a buyer’s agent asks you if you have spoke to a lender about your mortgage and what the outcome of that conversation was, he is actually performing his duty as real estate agent. One of the material facts he is required to disclose to listing brokers is a buyer’s ability to close on the property. A real estate agent is not allowed to write a contract that he knows a buyer can’t perform on. That is why it is so important to keep your real estate broker informed about your conversations with your lender. Your broker will also most likely talk to your lender on multiple occasions to make sure things are moving forward. The buyer agent also must inform the listing broker immediately during the life of the contract if they learn you are unable to close for financial reasons such as loss of job or change in your economic situation.

The buyer agent is making sure you are not wasting everyone’s time

Another reason a buyer broker should inquire about your ability to get a mortgage is that if you can’t get a mortgage or qualify tor a house in a specific price range is it is truly a waste of time for everyone involved. It takes time for a seller to get ready to show their home for each appointment, the buyer broker needs to meet you at the home and show you properties you might be able to purchase. It wastes the buyers time as well. No one wants to spend time looking at properties they can’t buy.

In a seller’s market you must be ready to submit an offer that day

It is sellers market in most the US in 2018. If a buyer sees a home they like and they are ready to make an offer they need to be ready to make the the offer fast or they will miss out on the home. It is also required by almost every single seller now for the buyer to submit what is called a pre-qualification letter with their offer. A pre-qual letter is a simple letter, usually about a paragraph, from your lender saying if all the info you gave them can be verified you can get a mortgage on a particular home. This letter must be submitted with your offer for the sellers to consider your offer valid. Most real estate agents will advise their sellers not to sign the offer until they get that letter. The sellers don’t want to take the home off the market and find out in 2 weeks a buyer can’t get a mortgage.

Some luxury homes can’t even be viewed prior to proof of ability to purchase

Some luxury homes are not even accessible to buyers until they either show proof of funds or a pre-qual letter. It is isn’t uncommon when working with other luxury brokers for them to ask me to present them with proof a buyer can afford the home. This is understandable and an acceptable practice in the luxury home market. It is for the sake of bot wasting people’s time but also security. Almost every 4 million dollar home has some pretty nice stuff in it. The sellers just want to make sure it just isn’t someone looking to case the place.

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