Qualifying Buyers from a Seller Side Perspective

home buyer signing papers with small home model in foreground
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When you list a property, you try to get as much useful information from your seller clients as possible. This would include their urgency to sell, and their preferences as to showings and prospects brought into their home.

If your sellers have a low urgency and ask you to only show the property to those who are financially capable and seem to have a serious interest, then you should try to qualify the prospective buyers using those criteria. Sellers with high urgency might want every interested prospect to see the home.  Other than probably taking up a lot of your time in needless showings, it's your job to work for your sellers.

The Seller Has Control of Showings Only to a Point

You cannot in any way limit who sees the property in violation of the Fair Housing laws. If your seller in any way indicates that they have wishes along these lines, be very clear that you will not participate in limiting showings in that way. It might also be advisable to extricate yourself from the listing if possible. If these wishes are even hinted at prior to the listing, don't take it.

Savvy sellers may use financial limitations to indirectly skirt Fair Housing Laws.  They may give you instructions to limit showings to people with incomes over $X.  Since income is only one component of loan qualification, that is really a suspicious request.

Make Sure the Buyer Prospect Is Financially Able to Purchase the Home

This is an uncomfortable area for many real estate agents. It doesn't need to be a trying experience. If the buyer indicates a price range, it's a comfortable question to ask if they've pre-qualified with a lender. If not, it's easy to indicate that doing this will place them in a better position when home shopping.

If your listing is outside of their purchase capability, you should look to your seller clients' wishes before showing to these buyers. After all, many buyers qualify at a level they set and later move up and re-qualify to get what they want.  However, you can also put yourself at the mercy of "lookie-loos" by showing your listing to people who aren't qualified.

The Motivations and Interests of the Buyer

A good buyer interview is always highly recommended. After all, you're going to be spending your most finite resource (time) with them, as well as gas and vehicle expenses.  I have even chosen to no longer show properties of certain types in my vacation home area simply because many people wanted to see them out of curiosity rather than any real desire to buy one; these are Earthships.

Learning how to use conversation to elicit information comfortably is important. Talking to the buyers about their wants and needs in real estate, as well as their current situation and urgency is quite important. At this point, we're working from our seller clients' perspective in assessing the viability of these buyer prospects. Parading uninterested prospects through their home is not necessarily in their best interests.

Unlike Buyer Representation, This Decision Is All About Your Seller Clients

When qualifying a buyer for one of your listings, we're not using the same criteria as we might when working with them on other listings or as their buyer agent. This process should be all about your listing clients and their needs. Even if you wouldn't want to work with this buyer in showing other properties, if it's in your sellers' best interests, show them your listing.

It's Easier After the Housing and Mortgage Crash

Six years and later after the crash that began in earnest in 2007, the task has gotten easier. However, mortgage lenders are still much more conservative in granting loans and asking for higher down payments. If a buyer comes with a pre-qual, at least you can expect that they have the credit score necessary to make the purchase.

However, remember that a pre-qualification letter is really not worth much.  There are so many things that can kill a loan between the contract agreement and the closing, that you can't really count on them for much.  Any strategies you can use to get lenders to make further commitments during the process is the way to go.  You can also specify a contingency to have a final loan approval by a certain point in the transaction process.