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Yes this is normal. We don't want to waste time with off market sales with buyers that can't perform. The agents doesn't want to talk to a potential seller unless they know you are ready to buy.
The agent is wanting to show me properties and want my approval letter. They already know price range and there are no current listings on one agency site or for sale by owner that is of interest.
Until there is something in my price range and of interest, I don't think they need my approval letter.
The agent is wanting to show me properties and want my approval letter. They already know price range and there are no current listings on one agency site or for sale by owner that is of interest.
Until there is something in my price range and of interest, I don't think they need my approval letter.
What price range you may be willing to look at and what you are eligible to borrow may not be the same. Don't forget potential room for and strategies for negotiation and different approaches for down payments. All this angst over a piece of paper that is really a sort of estimate, not written in stone? Withholding information from the agent makes it harder for them to work on your behalf. Probably isn't to your benefit.
Last edited by Parnassia; 04-25-2024 at 06:26 PM..
It seems to me that any "approval letter" from a lender would have to be a "contingent" approval at best. How could the bank GUARANTEE that they will lend John Doe X amount of money at some time within the next 30, 60, or 90 days when they don't know what MIGHT happen to John Doe's financial situation in the coming month(s)?
In the next few days, Mr Doe may go out and trade his paid-for old car for an expensive brand-new car and in so doing take out a new loan for a HUGE car payment which could adversely affect the amount of real estate mortgage he would qualify for.
Or, Mr Doe may get fired next week for coming in to work DRUNK again after having had several warnings about such behavior. Bottom line, I don't see how any bank could GUARANTEE a loan to anyone unless that person had the money already deposited in their bank. Even then, what's to stop the person from withdrawing that money after the purchase agreement is signed and spending/blowing it on something?
The agent is wanting to show me properties and want my approval letter. They already know price range and there are no current listings on one agency site or for sale by owner that is of interest.
Until there is something in my price range and of interest, I don't think they need my approval letter.
They DON’T know your price range though other than what you’ve told them. Go back to your lender and say look i know I’m qualified up to a million but I’m not spending more than 750k. Can you issue me a letter for that amount instead? And then forward that to your agent. The preapproval letter is literally their only proof that you are qualified to purchase.
As a Realtor, we get similar calls ALL THE TIME from “buyers†— there are only so many hours in a day, so if you want to be taken seriously, please do what’s required of you so they know you’re not just another scammer.
They DON’T know your price range though other than what you’ve told them. Go back to your lender and say look i know I’m qualified up to a million but I’m not spending more than 750k. Can you issue me a letter for that amount instead? And then forward that to your agent. The preapproval letter is literally their only proof that you are qualified to purchase.
As a Realtor, we get similar calls ALL THE TIME from “buyers†— there are only so many hours in a day, so if you want to be taken seriously, please do what’s required of you so they know you’re not just another scammer.
Yes.
If a lender will not give you a letter with an amount you want under your maximum approval, you need a new lender.
If you go to your max desired, and a counter-offer comes back a few thousand over that letter you got, and you want to proceed above your initial limit, your lender will give you a new letter covering that higher amount. IF the lender won't, you picked a poor lender.
If you need a letter for a few addresses because you are losing in multiple bid offers, your lender should provide you with a letter for the amount and address you request.
If your lender is not onboard with these points, find a lender who is.
An agent asked me last week for price range, loan approved and copy of that.
Your Realtor and your loan officer both have a fiduciary responsibility towards you. If you do not share information with your Realtor, you are asking her to represent you with one arm tied behind her back. What if you want a house so badly, you are willing to _____________(whatever). How in the heck can she protect you if she doesn't know if you are capable of pulling it off and that you understand the ramifications?
Now, I assume you are referring to a written loan commitment? Or are you talking about a letter the loan officer wrote out? If a lender's written loan commitment, absolutely not - do not provide a copy to anyone. There is information in those that no one (but you) has a right to see.
This is what I would do - talk to your loan officer, tell him/her you would like them to talk to your agent and verify you have a loan commitment and to share any major contingencies (house to sell, stocks to liquidate - that takes time and you can't close in two weeks, and so on). Then, when you are ready to make an offer, have the loan officer write the letter for the offer price, no higher, and state you have a written loan commitment. You can control the letter and any loan officer worth keeping, is willing to write as many letters as it takes for you to get a ratified contract.
Now, if you are talking about a loan officer that looked at your paperwork but did not turn it into an underwriter, any preapproval they give you is basically worthless. There are lenders that will provide loan commitments without properties, but not all sellers will require them. If two offers are equal, guess who is most likely to get the contract? The problem your Realtor is concerned about, if that loan officer doesn't know what they are doing, there's some pretty big holes in most files that can kill a loan approval.
I think you need to look at your Realtor in a different light. You need to view her as your protector in this process. Let your lender have a frank discussion with her. It will only benefit you. If you cannot view your Realtor as your protector, you need to change Realtors. It really is that simple.
Your Realtor and your loan officer both have a fiduciary responsibility towards you. If you do not share information with your Realtor, you are asking her to represent you with one arm tied behind her back. What if you want a house so badly, you are willing to _____________(whatever). How in the heck can she protect you if she doesn't know if you are capable of pulling it off and that you understand the ramifications?
Now, I assume you are referring to a written loan commitment? Or are you talking about a letter the loan officer wrote out? If a lender's written loan commitment, absolutely not - do not provide a copy to anyone. There is information in those that no one (but you) has a right to see.
This is what I would do - talk to your loan officer, tell him/her you would like them to talk to your agent and verify you have a loan commitment and to share any major contingencies (house to sell, stocks to liquidate - that takes time and you can't close in two weeks, and so on). Then, when you are ready to make an offer, have the loan officer write the letter for the offer price, no higher, and state you have a written loan commitment. You can control the letter and any loan officer worth keeping, is willing to write as many letters as it takes for you to get a ratified contract.
Now, if you are talking about a loan officer that looked at your paperwork but did not turn it into an underwriter, any preapproval they give you is basically worthless. There are lenders that will provide loan commitments without properties, but not all sellers will require them. If two offers are equal, guess who is most likely to get the contract? The problem your Realtor is concerned about, if that loan officer doesn't know what they are doing, there's some pretty big holes in most files that can kill a loan approval.
Re the BOLD:
That's MUCH too time consuming. Suppose you find the house on which you want to make an offer on Friday night or Saturday morning. It will be at least Monday morning before the banker will be back at work, and likely wouldn't be able to furnish you a letter until at least Monday afternoon, or maybe later depending on his/her schedule.
When you want to make an offer, you want to make it NOW. Far better, IMO, to simply furnish a letter from your banker to your REALTOR showing the maximum amount you are eligible to borrow or pay CASH for. Then, if/when you find a house that you want, you can have your realtor assure the other realtor that you are well qualified and approved for that purchase.
All this red tape about getting a new letter every time you decide to make another offer or increase an existing offer by a few thousand dollars is a bunch of hogwash. Actually, I have a more descriptive name for it than "hogwash", but the language filter on here won't let me use it.
All of this red tape BS is one reason I only use realtors when necessary, usually when purchasing. When I'm ready to seriously consider buying a house in a particular market, I find a realtor and disclose sufficient information to him/her about my capability and intent to purchase a property. If that's not sufficient for them, then I find a different realtor.
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Quote:
Originally Posted by Chas863
When you want to make an offer, you want to make it NOW. Far better, IMO, to simply furnish a letter from your banker to your REALTOR showing the maximum amount you are eligible to borrow or pay CASH for.
As a former realtor, I feel this is bad advice. You don't want the seller how much you are approved for, only that you have pre-approval for the amount of an offer. You don't want to make it clear to the seller that you may be approved for more by the lender so that they don't insist on a higher selling price before accepting an offer.
Obviously, bankers work "bankers' hours" and it is not likely that late Friday, a potential buyer likely will get a new, updated letter until Monday. Not likely a home/property closing will happen on a weekend either. Anyone can make an offer at any time, but the reality is that real estate transactions typically only occur during business hours. This is nothing new and whining to a bank or title agency won't change anything. Heck, I doubt that it would be any different with a real estate lawyer either.
As a former realtor, I feel this is bad advice. You don't want the seller how much you are approved for, only that you have pre-approval for the amount of an offer. You don't want to make it clear to the seller that you may be approved for more by the lender so that they don't insist on a higher selling price before accepting an offer.
On this, I'd say "it depends". If you're offering LESS than list, definitely don't over-share your higher limit. You want them to think you're offering all you can.
If you're in a bidding war situation, it can be good to share that you are NOT near your limit, especially if the bidding may not be done yet. Most bidding war situations around here, sellers should be more concerned about being over appraisal than being over the buyer's limit.
Quote:
Obviously, bankers work "bankers' hours" and it is not likely that late Friday, a potential buyer likely will get a new, updated letter until Monday. Not likely a home/property closing will happen on a weekend either. Anyone can make an offer at any time, but the reality is that real estate transactions typically only occur during business hours. This is nothing new and whining to a bank or title agency won't change anything. Heck, I doubt that it would be any different with a real estate lawyer either.
Actually, I have the cell phone numbers of all the lenders we're working with, and they can get me a new letter in 5 minutes, be it Friday night or Sunday afternoon. If we're out looking and find "the one" we call the lender to send a new letter, while we're on the way home to write the offer, whenever that is.... bankers hours doesn't mean mortgage brokers, or real estate agents.
Last edited by Diana Holbrook; Yesterday at 03:29 PM..
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What price range you may be willing to look at and what you are eligible to borrow may not be the same. Don't forget potential room for and strategies for negotiation and different approaches for down payments. All this angst over a piece of paper that is really a sort of estimate, not written in stone? Withholding information from the agent makes it harder for them to work on your behalf. Probably isn't to your benefit.
