Profile picture for JMC7070

We plan on listing our home as a FSBO, is it reasonable to request a bank approval ltr upon showing?

  • August 24 2010 - Wheatfield
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Answers (18)

Best Answer

Profile picture for hpvanc
I'm not an agent, but I personally looked FSBO's when I was shopping, and would most likely have crossed them off the list if it was required just to look.  Hold some open houses, I actually preferred this method of scoping out a house before I made an offer.  Definitely require it with an offer and keep in mind that most buyers will get the letter for exactly the amount they are offering, so don't automatically reject the offer if they have a letter for less than you will accept.

At least Maria didn't try to suggest it was illegal to do a FSBO, I don't think the Realtor that did that posts on here anymore, but yes where is the hard evidence, that it is less safe. 
  • August 24 2010
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You risk losing a potential buyer because if they are not working with an agent, they may not have heard that it helps to be prequalified. A lot of people don't need a mortgage, when they submit an offer, the bank will write a letter stating they have the funds to cover the amount of the house (the price of the house will be written in.) Would you want to risk losing buyers like these? There are a lot out there, perhaps they inherited a home they just sold, or a business they just sold etc.

  • October 05 2010
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If someone is asking you to take time out of your day to show your home privately, then you certainly have the right to determine whether they can actually purchase your home.  This is documented with a pre-approval letter.  If anyone has a problem with this, let them know that when you're holding an open house, and inform them that they're more than welcome to come by and see the house at that time. 
  • September 30 2010
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Profile picture for patlordagent
Never or it won't sell!
  • September 18 2010
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Yes it is reasonable.  They simply have to contact a loan officer and can usually have a letter within 15 min. All you're really looking for is that they've taken the first step.

  • September 18 2010
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Profile picture for Mills Realty
It is certainly reasonable, but keep in mind that some potential buyers will give you grief over it.  My feelings are a person isn't really a buyer unless they have gone through the pre-approval process.  Until then they are just looking.  There is no personal information on a pre-approval letter other than name and the amount they are approved for.

Simon Mills
Mills Realty
  • August 31 2010
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Most seasoned agents will ask for a pre-approval letter before they take buyers out to see homes, so I don't find it unreasonable to request. With that being said, a request it simply that, a request for their information. A buyer may or may not be comfortable with presenting their financial information before the offer and that is up to those individuals. That does not necessarily make them less serious or unsafe, just protective of their personal information. You may also want to pay attention to the bank that the pre-approval is from. Though there have been substantial changes in the mortgage industry, there are internet companies that I would not necessarily trust to get me to a timely closing. I like to have a local contact to connect with if there are any hurdles.  
Often FSBO's do not want to pay a commission to a buyers agent, but if you are willing to do so, you may get more qualified buyers as well.  
  • August 31 2010
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Profile picture for HH0101
I think that making it a requirement to look will deter many buyers. It is probably best to hold some open houses and see what type of responses you get that way.

Hope that helps!
  • August 31 2010
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Profile picture for remaxagent33
Absolutely it is reasonable to see if someone has buying power before you allow them in your home. It will save you time and sort out people just looking and not serious. Good luck.
  • August 30 2010
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It certainly doesn't hurt to ask but many buyers aren't going to toss out that information when they are just looking.  Many clients that I have were at one time FSBO's and what I hear most often is a lot of their potential buyers blew them off when they started asking about being pre-approved.  It seems that a lot of buyers are not willing to give up that information to a FSBO.  Whereas, as an agent that's the first question I ask and I don't show them property until I know whether or not they are equipped to purchase.  I don't have time to waste and neither do my sellers.  I would most definitely not accept a contract though without a pre-approval. In fact, if you have a buyer wanting to negotiate I would most definitely require a pre-approval before I started tossing around figures. That just keeps you on the safe side.

  • August 30 2010
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Let the agents and lawyers earn there money. Don't do for them, I am a listing agent and have found that lots of "for sale by owers" loose so much money in the marketand transaction. But all we can give you is advice. All bank approval is only part of the screening process. 
  • August 26 2010
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Do whatever makes you comfortable.  Normally, the pre-approval is presented  (required) with an offer.  Showing and listing your own house takes time and energy.  Best of luck.
  • August 25 2010
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thanks rockinblue.. great information that homeowners who are considering fsbo'ing their homes should understand..

while it is not unreasonable to request the pre approval,
when selling on your own buyers have a different mindset..
they may not be so forthright to share this with you upon
first look..

i think that if you are insistant on trying this route you may
want to ask some key questions before showing to anyone..
pre screening potential buyers is key..
  • August 25 2010
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I would be very surprised to see any statistically valid data showing that a FSBO is less safe than using an agent.
  • August 24 2010
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When you list FSBO, you open your home to anybody.  When you have a good agent marketing your home not only can they screen the "Tire kickers", but agents only bring preapproved buyers to look at your home.  Just from a safety standpoint, FSBO is a risky move.  But good luck to you.
  • August 24 2010
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Do whatever you feel comfortable with, but requiring it will run off potential buyers no matter the value.  For higher value homes, some like to require it because it keeps out nosey people just getting ideas for their own home, etc.  But that being said, those who have the cash for a high value home are usually insulted to have to prove their worth.  FSBO is fine, but that's where a good Realtor could screen them for you as I do for my clients.  I screen out the ones just wanting to "kick the tires" for my clients.  Best wishes.
  • August 24 2010
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It is reasonable, but might deter potential buyers. Unless you have a high dollar house which may attract a lot of folks who are curious - most people I have worked prefer to waste their time with open houses over personal showings. It is uncommon on most homes under $750k in the markets I have worked in. Buyers may see it as invasive to present financial qualification before they know if the home is a match and many buyers have their bank draft approval letters based on the amount they are willing to offer for the house (which they usually do not know until they have been inside).

I would recommend not accepting any offers without one.
  • August 24 2010
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Profile picture for rockinblu
Yes it's reasonable. As a potential FSBO, you might want to read this.
  • August 24 2010
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