Why?

grlwprlsAugust 5, 2009

My home is listed for $700K+ in a market that isn't as slow as other parts of the country; however, we are still dealing with the tightened lending standards.

We've had a lot of traffic considering our price, but my issue is that NOT A SINGLE buyer has been pre-approved, let alone pre-qualified, for a mortgage. And honestly, the chance these are hard cash buyers is slim.

To me, this seems like "lookie-loos" rather than serious buyers. I agreed to two open houses to give these people a chance to see "how the other half lives" (not as high end as they expected, I'll bet!) but to have to vacate my house with my dogs and chase my daughter around cleaning her room for people who have no idea if they can qualify to buy my house seems to be a bit much.

My agent seemed to act like it's local custom to just shuttle around folks not having any idea if they can afford the homes they are being shown. I mean, I'd love to be in the million dollar range, but I would have *never* taken up an agent's time to get taken to homes I know I can't afford.

Should I put my foot down and say "pre-approved" (at the least) buyers only? Or how do you handle it?

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igorz

This topic was covered on the board multiple times. You'll definitely limit number of "lookers" and potential buyers. The lookers could potentially turn into buyers or tell somebody. Another thing, in your price range the buyers would need jumbo loan. Not too many bank offer anymore and interest is higher.

    Bookmark   August 5, 2009 at 11:40AM
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ncrealestateguy

How do you know that every buyer has not been pre qualified?
If that is the case, stop inviting them in with open houses.
If it really bothers you, then put in the MLS that all showing appointments need to start with a faxed pre approval letter sent to your agent.

    Bookmark   August 5, 2009 at 12:08PM
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xamsx

$700K is not high-end enough to expect people to give up their financials just to view it. I'd pass right by your house with such a stipulation. Too many others out there and I'd question just how difficult the seller would be if I decided to make an offer.

And, at $700K I'm guessing most of the people looking to buy today would be cash buyers or have to have a great down payment. As igorz pointed out, a jumbo is not an easy mortgage today.

    Bookmark   August 5, 2009 at 12:37PM
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landmarker

I would not put any barrier in front of any looker in the buyer's market. Why? What if a "lookie lou" falls in love with your house and that makes them decide to start the process? Or what if the lookie lou has a friend or relative who is more serious? What if the serious buyer has not gotten around to it yet. Good outcomes of a business nature in your life require work. I would insist on prequal before engaging in price negotiations though.

    Bookmark   August 5, 2009 at 1:28PM
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sweet_tea

Open Houses invite lookie-loos, which often are neighbors or folks that want to look at your interior design for ideas, or someone that has a similar home and it is on the market and they are sizing up the competition, or folks that just want to see what your home is like, etc.

Quit the Open Houses and then most of the lookers will be serious buyers.

I stopped in at Open House a few doors down from mine just to see the house, which was comparable to mine. I saw another neighbor viewing the house the same time I was there. If it wasn't an Open House, we never would have stopped to see it. I didn't plan on selling or buying anything, but was just curious. I suppose there was a very tiny chance that I loved the home and possibly would have made a decision to sell mine and buy that home. I guess this happens sometimes with Open Houses...spur of the moment decisions.

    Bookmark   August 5, 2009 at 3:55PM
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jenny_from_the_block

I agree - as a potential buyer, I would be offended if I had to bring a preapproval letter with me. Plus, some people may be cash buyers, but be hesitant to make that known openly right away. If I'm taking time off work to go look at a house, it means I'm looking as a potential buyer.

    Bookmark   August 5, 2009 at 6:18PM
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cmarlin20

I wonder how you KNOW not one person is qualified.
If you don't want lookie-loos, why have an open house?
I would never but barriers in front of potential buyers.
I've never asked about pre-approval when viewing a house, I've bought and sold at much higher prices than yours, I wouldn't be offended if asked, but wouldn't want to bother getting paperwork done to look at a house. I've never requested such an approval when selling my house.
I don't do open houses, I know some like them, I don't think they're worth it.
Maybe $700k is extremely high end in your area, it isn't in many areas, so I don't understand your demeaning thought of "give these people a chance to see "how the other half lives"
I must admit you gave me a chuckle! Did you feed the peones? LOL
I hope your house is as valuable as you think it is, or it will be difficult for you when you get the lower offer.

    Bookmark   August 6, 2009 at 12:51AM
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marti8a

In my town, $700K could be high end, unless the value came from the land or location or history.

    Bookmark   August 6, 2009 at 9:33AM
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western_pa_luann

" I agreed to two open houses to give these people a chance to see "how the other half lives" "

That actually made me laugh aloud when I read it!

THESE people.... ha!

    Bookmark   August 6, 2009 at 11:39AM
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cmarlin20

" I agreed to two open houses to give these people a chance to see "how the other half lives" "

That actually made me laugh aloud when I read it!

THESE people.... ha!

I'm glad I'm not the only one. I laughed too, picturing the "ordinary" people waiting in line just to see it, maybe having the chance to just touch something belonging to "those people"

Is this person selling the Hearst Castle?
Maybe she can charge admission?LOL

    Bookmark   August 6, 2009 at 12:18PM
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xamsx

I agreed to two open houses to give these people a chance to see "how the other half lives"

I didn't comment on it... well, actually I did but my post was much more acerbic than either western_pa_luann or your response cmarlin20, so I deleted the comments before I posted.

I may have laughed but the arrogance of that remark is one for the annals here.

    Bookmark   August 6, 2009 at 12:39PM
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graywings123

My agent seemed to act like it's local custom to just shuttle around folks not having any idea if they can afford the homes they are being shown.

It sounds to me as if the OP is complaining about individual showings for non-qualified buyers, not about who showed up at the open houses.

It is the responsibility of the showing agent to determine whether the potential buyers can afford a certain house. I can't imagine an agent would waste her time (and gasoline) showing a house the buyer can't afford.

    Bookmark   August 6, 2009 at 12:54PM
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c9pilot

Pre-approval letters are not unusual in our area. There are just too many people out there that are not informed about what's going on in the market.
I know several agents who do not consider buyers "serious" until they present a pre-approval letter or can otherwise explain their cash situation. I would be seriously unhappy if I spent three days driving buyers around using my gas tank only to find out that they are "underwater" on their current home and have to sell it to buy the new one. Or that their current home is a short sale and they want to get into a new one before it goes into foreclosure. Seriously, these scenarios have happened.

    Bookmark   August 6, 2009 at 12:58PM
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brickeyee

Pre-approval letters do not actually mean anything.

They are NOT a commitment to make a loan.

I can get one for the asking from my regular mortgage broker.
I just call and say what amount I need the letter to say,and it shows up in a day or two.

    Bookmark   August 6, 2009 at 1:36PM
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linda117117

Pre approval letters are customary in some areas and not in others. There are homes listed in my MLS that ask for all buyers to be pre approved and honestly, it makes my job as an agent easier if a homeowner requires it. In my area, most agents ask for letters before taking people out. That doesnt mean that if a buyer doesnt have one, he can't find an agent to take him out, some will. Some will not. If someone wants pre approved buyers that is their perogative. If someone gets offended and will pass the house by, then so be it. They have to understand that someone is opening up their home. They dont have to open it up to ANYONE just because its for sale. There are ALOT of people that will waste a homeowners time, an agents time and their own time because they simply don't know what they can afford.

Pre-approval letters do not actually mean anything.
They are NOT a commitment to make a loan.

I can get one for the asking from my regular mortgage broker.
I just call and say what amount I need the letter to say,and it shows up in a day or two.

Some pre approval letters mean nothing, Others are gold. A good agent can tell which is which.

And I have to agree, the comment about how the other half lives, sounds incredibly arrogant.

    Bookmark   August 6, 2009 at 3:02PM
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auntjen

"... how the other half lives ..."

Oh, that's rich - and not in a good way!

    Bookmark   August 6, 2009 at 3:19PM
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valray

In grlwprls's defence, I read "these people" as the lookie-loos, not as a sub-class of people. And I thought the comment about "not as different..." was trying to take some of the edge off the statement. In my small city, average house price is $235,000 so seeing a $700,000 house would be some people's idea of entertainment.

    Bookmark   August 6, 2009 at 3:26PM
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auntjen

Please. Her post definitely reeks of an arrogant "us vs. them" mentality. "Not as high end as they expected, I'll bet!" Sheesh. Gimme a freakin' break ...

    Bookmark   August 6, 2009 at 3:34PM
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brickeyee

"Some pre approval letters mean nothing, Others are gold. A good agent can tell which is which."

Must take mind reading.

The ones I get are as real as can be, but are still just a phone call away.

They are nothing but a gimmick to try and make sellers feel they are dealing with someone who might actually be able to go through with a purchase.

They do not commit a bank to a loan, or actually show the person has been approved for a loan.
They all have a weasel word warning on them that they are NOT a loan commitment, and are NOT an indication that the lender will actually fund a loan.

Lenders are doing very late credit checks (a day or two before closing in some cases) on borrowers to make sure there has been no significant change in their financial position.
This means they could deny financing with only a day or two to closing.
So much for a letter showing anything.

    Bookmark   August 6, 2009 at 4:31PM
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marti8a

To me, this seems like "lookie-loos" rather than serious buyers. I agreed to two open houses to give these people a chance to see "how the other half lives" (not as high end as they expected, I'll bet!) but to have to vacate my house with my dogs and chase my daughter around cleaning her room for people who have no idea if they can qualify to buy my house seems to be a bit much.

I took "these people" to be the lookie-loos also. I have a friend who used to go to open houses all the time so she would know what she wanted in a house when she finally bought one, and after they built a house (probably $1 mil) to get decorating ideas. She had no ideas of buying, just looking. She was one of "those people" but not lower class.

Isn't that why we pay to go on new home tours? Just for a lookie-loo?

    Bookmark   August 6, 2009 at 5:44PM
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grlwprls

It was my agent who said to do the open houses to let people see "how the other half lives" (here $700K is a high end home, where I'm from it's entry level) because "open houses are what people do to entertain themselves on Sundays." You'll notice my use of quotes around that phrase above.

It seems to me that if you agree to do open houses *that* is when people who are out real estate shopping for their friends, as you all suggest regularly happens, would conduct their searches - not at 5:30pm on a Wednesday.

I just think that it's interesting that for a high end home *for my area* (which my realtor supposedly specializes in) no one cares if you can afford the home. My agent said that twice the buyer's agent told her that their client "discovered when they called their lender that they don't have sufficient down payment." That shows that people aren't really clued in here about what has changed in the lending world.

When I bought our new property (that is being renovated) the seller's agent called my agent 3 times for my pre-qual letter because since I was buying in town I had to have the required reserves on hand to qualify - even though that property was listed for $200K - because of the buy and bail regulations. Of course custom here is that your house comes off the market for 2 weeks once an offer is pending, so maybe that agent was more concerned that I could go forward with the deal?

I apologize for my inelegant language. Good god, I still have my IKEA "we just got married and moved across country" furnishings, so I doubt anyone got any great decorating ideas - I am sure folks were powerfully disappointed! But they did get iced tea and cookies.

    Bookmark   August 6, 2009 at 6:48PM
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kats_meow

Where I am I don't think it is common to have pre-approval to look. When we bought out current home (listed at $560k which was high end around here) we had no pre-approval letter (FWIW I knew I could get one, I had a mortgage broker but just had no reason to do it until I made an offer on a house). After we had the contract I was asked to provide one within short order which I did...

    Bookmark   August 15, 2009 at 10:20PM
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linda117117

"Some pre approval letters mean nothing, Others are gold. A good agent can tell which is which."
Must take mind reading.

The ones I get are as real as can be, but are still just a phone call away.

Doesnt take mind reading at all.Just takes a mind. A GOOD typical pre approval letter states, "based on a recent credit report and information provided to us" you have been pre approved for bla bla bla...

The ones you can get in a heartbeat say something like...

This prequalification is based solely on the LIMITED and UNVERIFIED INFORMATION PROVIDED, and the authorization to obtain a credit report.

Big BIG DIFFERENCE.

Neither means there is a mortgage committment, but one is miles away from the other.

    Bookmark   August 16, 2009 at 5:39PM
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creek_side

Is this thread still going? What part of "Open House" is not understood? If your agent holds an open house, anyone can come and look. It is an open house after all. Most, if not all, open houses are an opportunity for the showing real estate agent to pigeon hole potential buyers in the hope of selling them something that generates a commission. If it happens to be your house well and good, but don't expect it to be so.

    Bookmark   August 16, 2009 at 7:34PM
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