Why do agents ask clients to start with the loan process?

The #1 question I get asked by prospective clients, when we have the first several conversations, is why are you asking me to speak with a lender?

Usually, unless the agent is a really good communicator, it comes off a little salesy. People guard their finances, and don't like to feel obligated. Asking someone to get pre approved or have a discussion with a lender is a time commitment and people have a tendency to want to "get to the fun stuff."

Also, lets be honest here. Real Estate is a brutal business. There are a few bad apples, and not every real estate agent is or should be trusted right away.

With all of this being said. There are still good reasons to start here, especially if you are a newer buyer. Some of these reasons are:

  1. Your credit and income and job history are more complicated then you think. I often see clients that can buy less then they think or more than they think. Even really sophisticated buyers make this presumptive error.

  2. You don't really want your agent to be spending time looking at the wrong properties.

  3. You don't want to spend your time looking at the wrong properties.

  4. If there is a deal breaker issue that you forgot about. Say you defaulted on a student loan or had an expensive hospital bill that you just couldn't fully cover and you totally forgot about it. You need about 3 to 6 months I would say to work out a strategy to fix the issue. The sooner you start the better.

  5. The world is a scary place. Sellers are no longer comfortable with people just walking through their homes willy nilly. This is more true then ever in the era of covid19. Separating the real buyers from the window shoppers is more important than ever. Agents need to guard themselves from fraudsters and whatnot. It's safer for everyone.

  6. In a hot seller's market, the prepared client gets the golden goose.

  7. As a renter you should be aware of your current rent to buy cost benefit analysis scenario. You can't do this if you don't know what you can afford.

  8. Not every home is right for every loan product. You have to pick the loan product, and then you will know what types of homes you can buy.

  9. Lenders and agents when approaching your buyer challenges together can problem solve better than either of them can alone.

  10. You don't want to have to start shopping for the right lender when you are up against two other preapproved offers!

When you start with a preapproval by a good lender, its the foundation for a successful transaction!

Mortgage Process 101

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