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Our realtor won't let us look at home until we get pre-approved?

My husband and I recently decided to look at buying our first home. We got pre-qualified through our bank, and then selected a realtor that the mortgage lender suggested to me. She took us out last weekend to look at some homes, but when I tried to schedule with her to look at more this weekend, she told me that we need to get pre-approved before we continue looking. I told her that we are planning to call the lender tomorrow about pre-approval, but she said she doesn't typically take clients out until they are "fully qualified". Is this standard practice or should we find another realtor?
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January 31 2013 - Indianapolis
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Profile picture for wetdawgs
This is standard practice, and a courtesy to both the home owner who has their home for sale and has to ready it for a showing, as well as the buyer's agent. 

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January 31 2013
This is a great question and something we hear quite often.  As an agent whose income is commission based, every minute we spend needs to be productive.  Don't take it personally.

Generally only new agents will drive anyone to see any listing with the hope of a sale. More seasoned agents only focus their efforts on truly qualified clients.

In order to maximize profits, and reduce expenses, we need to ensure the clients we are working with are qualified to purchase in the budget offered..

We would not want to go shopping for homes in the Million dollar range only to find out the client is qualified for a $50,000 condo. 

Here in Florida, as this time of the year, we get a lot of window shoppers.  If the weather is no so good, the phone rings with people wanting to see "what's out there".  Total waste of agents time.  We are not free tour guides.

As a buyer, you also do not want to get your hopes up looking at properties out of your financial budget.  If you find a great house, nothing less will compare.

A pre-qualification is NOT the same as Pre-Approval.  Pre-Qualification is the lender stating based on cursary information, you would be qualified to purchase in "X" budget.  The problem is your credit was not pulled, nor your income verified.  Once that is done, the budget can change.

A pre-approval is a more comprehensive approval, where credit, income, assets, are verified and chances of obtaining a loan in the budget are much greater.

Good luck with your purchase.
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January 31 2013
This has become standard protocol.  Most agents will take a client out to see a few homes and then insist that the buyer provide their pre-approval.  This is not intended as an insult but as everyone's time is important, for an agent to take you out to view properties that you may not be able to afford, spends your time and theirs.  Additionally, on occasion, you may find the home of your dreams rather quickly, and the pre-approval letter is required with any offer you make - as well as your FICO scores and bank statement verifying you have the money to make a down payment should your offer be accepted.  This agent is not being rude or insulting but protecting themselves and you.  
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January 31 2013
What about if you do not get the pre-approval?  You will be dissapointed and all the showings would have been a waste of time.  Walk, don't run, get your pre-approval and then start looking at properties.
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January 31 2013
Getting preapproved before looking at houses helps you know the price range you can look in.  Once you're approved you might be able to spend more than you originally thought and if you fall in love with a house you won't have to be disappointed if you aren't approved.   I don't mind showing a few homes initially to get to know my buyers.  They often need help picking out a lender and I can help them with this also if they haven't picked someone to work with yet.
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January 31 2013

The request is normal, the agent asking you this seems to be a seasoned agent  he/she is looking out for your best interest. As a buyer you would want to know your buying power and the terms including down payment and interest rate with a pre approval. Best wishes!

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January 31 2013
Yes that's standard practice. Your lender should be able to quickly provide you with a pre approval on the same day.
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January 31 2013
It is very standard, for the reasons others have stated, but it also shows the seller that you are a serious buyer when you can attach your pre-approval letter to your offer.  Most sellers will not consider an offer without a pre-approval letter or proof of funds (if paying cash).
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February 01 2013
I work with a lender who can tell you over the phone..........within about 10 minutes,...........whether or not you are a good candidate for a mortgage loan and how much you might qualify for when you apply.

You can then follow up by rounding up the appropriate documents and quickly get pre-approved for the loan.  Takes a little longer (couple of days - mostly depends on how quick you get them the documents)

So - why would a Realtor want to waste tme showing a house to someone who refuses to invest 10 minutes in the process to see if they are good to go on a home loan.

I show my listings to buyers who are not pre-approved, but I do not show other agents listins unless my buyer client has invested some time in seeing what they can afford.  Anybody who can't spend 10 minutes talking to a lender is NOT serious about buying a home.
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February 01 2013
Great responses and all true.  This has become a standard of practice with many good reasons, as you have seen below.  But the most important one is, your agent is an experienced agent by the sounds of it, giving you good sound advice.  I wouldn't look at it as a reflection on yourself, but a reflection on the professional service you are about to receive.  Knowing the pitfalls of showing you homes that you are not qualified for or being able to present an offer with the prequalification in order, your agent is ready to represent you well.  Best of luck to you in your search!
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February 01 2013
Would you like to go to the mall without your wallet?  Is the same situation what happens if you find your dream home and then later you discover that you will not qualify to get that particular home.  It will be devastating for you and the agent will be loosing all day long.  It is nothing personal. It just the way it should be.  Most sellers ask for pre approval letter and a deposit beside the offer. 
Best of Luck,

Maria Cipollone
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February 01 2013
Profile picture for SoCal_Engr
While you're getting pre-approved, you may also want to do your own homework. It's typically possible to get approved for loan amounts (and monthly payments) much higher than you may be comfortable with.

Work out your budget. Determine what you are comfortable paying on the mortgage. Don't forget that you will also need to pay taxes and insurance, and should be setting aside money for maintenance/upkeep.

Then, use the information from the lender and your own research to determine "how much house" you are comfortable taking on.
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February 01 2013
As stated below...all similar responses!  Your lender should be close on the pre-approval by now, I would ale recommend getting a second approval to insure you have the best loan program available.  While many buyers talk to several real estate agents before they choose one...few buyers interview multiple lenders!

The other suggestion is (if you are not pre-approved until next week) consider grabbing the local paper and hit the road looking at open houses!  No pressure, and in your defense...you may even connect with another agent or lender while you are out looking on your own.

Good luck!

Scott Cary - Broker
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February 01 2013
Profile picture for user55870236
This is my personal take on things.  If you don't like what they are doing go somewhere else.  I know realtors want to make money, but I want to be able to find what I want and I want to be shown when I want to see it.  Personally, I would drop that person and find someone else. 
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Best of luck 
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July 08 2013

All I can say is, if I ran my business that way ... I wouldn't have one.
-Joseph-

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July 08 2013

The Realtor has the right to ask for a pre-approval.  Personally, I would consider how strong of a letter the pre-qualification is.  It is very well possible to have a pre-qualification letter that is strong showing details such as credit score etc.  The reason for asking for a strong pre-qualification letter or pre-approved letter is because some lenders will only  provide a pre-qualification letter. Realtors want to be assured that you are financially ready with a good credit history, willing and able to close.  You could find the house of your dreams and not be able to purchase, because your lender was unable to approve your loan.  It would be beneficial to you, your Realtor, the seller and the seller's Listing Agent if you had every thing  prepared and ready close.

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July 08 2013
It is standard for most agents to not show properties to unapproved buyers.  There are instances where I will show a person without the approval letter as long as I have had a conversation about there financial situation.  Being a past loan officer helps in this but most experienced agents know what questions to ask.  If the financial situation is complicated, there needs to be an approval.  The worst thing is to show a home, the buyer falls in love, then doesn't get approved for a mortgage.  The buyer and the agent have wasted their time.  As a buyer I would always want an per-approval so that I know what I can purchase and still be within my budget. 

Even a pre-approval doesn't guarantee you will be cleared to close by the lender.  Be aware that some loan officer do no put your file through desktop underwriting when they give a per-approval letter.  They simply looked at your credit.  If they don't ask certain questions, you may find yourself not closing.  
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July 08 2013
Standard practice --- without a letter of approval cant write offer on a property or at least have the offer taken seriously.   Weekends are difficult to sometimes find a lender to get letters.  If you found one you really liked you could loose it because someone else did have their letter with the offer.
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July 08 2013
 
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