Why do agents ask about preapproval?

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  • Relevant information: agents need to know if youíve done your homework on mortgages with the banks and if you know what your borrowing capability is

    Relevant information: agents need to know if youíve done your homework on mortgages with the banks and if you know what your borrowing capability is


Dear Heather,

I just called up a real estate agent because I want to look at a house they have listed. Within minutes they asked me if I was preapproved. Why do sales agents do this?

Buyer

Dear Buyer,

If you have never walked into an open house or called a real estate agent about a listing and been asked ó within minutes ó whether you are preapproved for a mortgage, then you have never walked into an open house or called an agent ... or at least not enough of them.

Just wait. Itíll happen, and you will most likely feel that it is pretty pushy for them to ask you that.

Matter of fact you may feel like itís a joke, as in, who are they to be asking me that personal information about my finances? But in fact itís no joking matter and hereís why:

Every single real estate agent should be asking you if youíre preapproved because itís entirely relevant for them to know. They are not asking you how much money youíve got or what your salary is, they are asking if youíve done your homework on mortgages with the banks and if you know what your borrowing capability is or how much you are comfortable with carrying as a mortgage. The reason is, if you are going to start looking at houses, itís very important for you to know.

It might come across as invasive. That may be because of how the agent asks the question or when the agent asks the question or simply because you donít know that itís a question that should be asked. Agents have different personalities. They all handle how they meet, greet and chat with customers in different ways. Thereís no one way to ďbeĒ, as a real estate agent. If you are finding one agentís manner is ďtoo pushyĒ for your personality, seek out another agent who will probably get the job done but in a more gentle way that will be equally as efficient.

Agents arenít asking you if youíre preapproved because theyíre looking to size up how much you can spend.

They want and need to know that you are informed, serious and qualified to buy a house, so that they can show you the most suitable listings.

With nearly 500 houses on the market for sale at any given time they have to try and choose which ones might best suit your needs.

Real estate agents do need to make sure theyíre working with someone who can actually buy a house.

They donít get paid until and unless the person theyíre working with buys a house.

So this is a matter of being careful about who they spend their time with. It might sound selfish, but you canít fault them for that.

Theyíre in business. Nobody cuts them a paycheque and showing people houses is not a public service or charity work.

Working with someone who is preapproved doesnít guarantee that theyíre going to make any money but at least itís an indication that the person they are working with can do something.

Agents also need to know how much youíre preapproved for in order to advise you as best they can. If you look at houses that are above your price range, you will then be very disappointed at any house that has a lower value, but is affordable for you.

Picture an agent showing you houses for weeks, and months.

You finally find ďthe oneĒ, get all excited and want to make an offer only to find out that thereís no way you could it.

This leads to heartbreak and aggravation ó for both of you.

It doesnít do either of you any good to go through all of that only to find out you canít afford the houses you were looking at or even buy one at all.

Worse is when you havenít started your pre-approval process and someone else looks at the property who has their pre-approval in hand and makes the exact same offer.

The owner goes with their offer as they are ready to buy and you unfortunately lose out on the house of your dreams because, unlike them, you are not prepared.

So even if you have just started browsing for a home just a little bit, and havenít gotten preapproved (yet) ó at least expect the question. Donít be offended when youíre asked. In fact, pay closer attention to the agents who do ask if youíre preapproved.

If theyíre asking that question itís a good sign that they are thorough and thoughtful about how they do their business.

Thatís the type of agent you want to have on your side when youíre buying or selling a house ó one whoís careful from the get-go; one who pays attention to the details; one who isnít going to waste your time any more than their own or allow your heart to be broken when you fall in love with a house you canít afford.

And if you want to get some really good attention and service from the best agents you come across, get preapproved before you start looking.

Let the agent know youíre preapproved before they even ask.

Youíll set yourself apart from almost every buyer the agent has ever met, and that will ensure that you receive great service.

ēHeather Chilvers is among Coldwell Banker Bermuda Realtyís leading sales representatives. She has been working in real estate for 27 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence. Read this article on Facebook: Ask Heather Real Estate

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Published Feb 28, 2017 at 8:00 am (Updated Feb 28, 2017 at 2:17 am)

Why do agents ask about preapproval?

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