Buyers in this real estate market enjoy many more liberties and advantages with sellers than I have ever seen since I was first licensed in 1996. Not only do they have the lowest rates in half a century, they have far more bargaining power, and in Westchester County, where a starter home can cost $500,000, that is huge. It is a great time to be on the purchasing side. The one thing they don't get to do, however, is consider themselves exempt from reasonable scrutiny regarding their qualifications to buy. Simply put, I as the listing agent have to verify things, and no amount of annoyance or insistence to the contrary can change that.
I have written previously how cash buyers simply have to show proof of funds if they want to be truly taken seriously. Today, I will reiterate that fact for buyers getting a mortgage. If you are going to submit a pre approval, or in today's case, a prequalification, it is part of my job to verify things, and that goes beyond your agent's "cross my heart" reassurances. It means in many cases calling the loan officer on the pre qualification letter and asking questions. Here are some that I would ask:
- Have you verified the borrower's credit?
- Have you verified income and employment?
- Have you run the borrower through your underwriting software (an industry standard)?
Today, we had an offer where it was disclosed that they were in the process of selling their current home, it was submitted with a pre-qualification from a mortgage broker, not a direct lender, and the amount on the letter was less than the offer. My question to the buyer agent was shrugged off with a reassurance that all would be fine because they had extra money. Perhaps that is all true, but my job is to verify, not take assurances blindly. Like I said, in Westchester, with the competing number of homes for sale, real estate mistakes can be very expensive. Having a deal die can cost my clients tens of thousands of dollars.
SO...I called the listing agent on the property they were selling (under contract, strong buyer) and I also spoke with the loan officer. I heard what I needed to hear from those I needed to speak with. Without getting into too many details, this did not sit well with the buyer, who actually called me directly.
Sorry, but that is how it is today. I have to verify the qualification of buyers before I can advise my client to accept an offer. Spending months off the market under contract with a buyer who cannot close is not acceptable. Buyers are the belle of the ball now more than ever, but they don't get a mulligan on basic due diligence from the listing agent. It is my job to verify, and the notion that I am invading their privacy is fallacious. It is absolutely our business to ascertain that the buyer can perform. If I wanted to take some perverse pleasure in sticking my nose in someone's personal business, I'd watch reality TV. This is business, and should never be taken personally.