Pre-Approved Gets an "A" in My Book

This issue gets me some flack from others in the real estate profession; pre-approval letters.  Buyers call all the time and want to see property they found while driving around, on the Internet or in the newspaper.  The information is everywhere.  I love helping buyers find that perfect property that they can call home.  What I do not like is showing buyers property that they cannot afford.

At a previous office, I discussed with another Realtor my policy on showing property to buyers I do not know:  I will show one property without a pre-approval letter, simple enough.  Whether someone walks in or calls about wanting to shop for a new home I take all of the normal personal information and information about their wants and needs for their home.  I ask if they are working with another Realtor (whole other issue!) and whether or not they have gone to a lender to get pre-approved.  After our first official meeting, I let them know that I will only continue to physically schedule property tours after I have received a pre-approval letter or proof of funds statement.  This may seem overkill for just showing houses, but I think it is necessary.  The Realtor I shared this with told me it was my job to show houses to buyers and it was wrong to ask them to provide proof that they could afford the houses that they wanted to see.

I on the other hand, think its just good business.  Do not get me wrong, there is a right way and a wrong way to ask for the proof, but I think it is more than necessary to do, especially in this economy!  There is a lot that goes into scheduling houses for tour, especially if there is a lot out there to see that fits the buyers needs.  First, I have to find the houses. Second I map there locations and plan the route.  Then I have to call each listing office so they can call the owners to confirm the showing times (usually the seller then cleans and prepares the house to be shown),  Lastly comes the part of driving and touring each property.  I do not personally think it is too much for a Realtor to ask for a pre-approval before going through all that.

I spoke with a local lender a couple weeks ago that said in the last two weeks, she had around two dozen clients come in to try to qualify for a loan; only 5 walked out with pre-approval letters.  I wonder how many of the 19 or so others had been dragging a Realtor around looking at houses. 

I get that just because someone cannot qualify to purchase their home right now does not mean that you can ignore them, but I think that it does mean that I should avoid 50 bucks worth of gas a week driving around looking at houses that they cannot buy.  For the buyers that cannot buy right now, I set them up with a listing cart that feeds them houses they are interested, I direct them to lenders that are more geared towards repairing credit and helping them mend their situation and I frequently check in with them to see if their situation has changed.  I want every buyer that is shopping, unfortunately not every shopper is a buyer!

Until next time, I hop all is well!