You’ve been thinking of purchasing a new home…maybe in Florida, maybe somewhere else. You’ve been looking at listings on the internet sites…Zillow, Realtor.com, Trulia, etc. And, YAY, you’ve found several that are very appealing. So…you contact a real estate agent…
The first questions a real estate agent will ask are…”Please fill out this buyer questionnaire”, and “Are you pre-qualified or pre-approved for a mortgage?” Hunh? “I’m just looking…I’m not ready to buy, I don’t need to get a loan yet…and I sure don’t want to give you my contact information so you can bug me”.
If you aren’t willing or prepared to share this information, consider attending open houses until you are. Open houses are perfect for unqualified “lookers”…anyone can show up to see homes that are for sale and scheduled for an open house, regardless of ability to purchase. You will be asked to provide minimal contact information on a sign in sheet, as noted below. However, private showings are a bit more time consuming, sometimes difficult to set up and more expensive. (Remember, real estate agents are not employees…therefore, they receive no reimbursements for expenses or payment for their time until the property goes to settlement.)
PART I-THE BUYER QUESTIONNAIRE
The buyer questionnaire is for the protection for the seller.
Property owners aren’t always onsite for showings. The property most likely represents one of the biggest investments of the seller and, in many cases, the home is filled with their most prized personal possessions. Would you want unknown strangers roaming around your home when you aren’t there? The buyer questionnaire (and open house sign in sheets) gather minimum information that can be used to provide the seller with your contact information in the event of a problem. Unfortunately, there are many scammers and dishonest individuals out there that take advantage of a good thing.
In addition, this questionnaire is used to help your agent determine your wants and needs. The more specific you are, the more likely you will find that perfect property…without wasting time on those you have no interest in.
Real estate agents are small businesses. For the most part, they follow their own procedures, and those required by their Brokers. All agents may not choose to use buyer questionnaires…however, the more information you provide early in your search, the better an agent is to helping you.
It is becoming more common for real estate agents (and property owners) to deny private showings if you can’t show proof of your ability to purchase the property. In addition, it is becoming more common for sellers to require proof of funds or proof of a lender’s pre-qualification before accepting offers/contracts for the purchase of their property.
A pre-qualification is an estimate of what you might be able to afford, based on your credit history and a scan of minimal documentation. A pre-approval means the lender has verified your documentation and carefully checked your credit…and approves a loan for a specific amount, usually for a specific period of time. A pre-approval, therefore, is a more meaningful document, although it does not guarantee that a mortgage will be approved. Proof of funds is a document that your bank would provide in the case of a cash purchase…generally, a bank statement could possibly be accepted initially, but is not sufficient for submission with an offer.
A pre-approval letter/proof of funds may mean the difference between your offer being accepted or rejected. With either of these documents, your offer will be considered more seriously. It could help with price negotiations. It certainly narrows your search and reduces disappointment because you know your budget range. In addition, having the pre-approval letter speeds the settlement process because many of the approval steps have already taken place.