Tag: buying a home

Happy Clients Realty Group - Ali Palacios > buying a home

4 Reasons You Should Hire Your Friend Or Family Member As Your Real Estate Agent

Posted on by Ali Palacios - Broker

Should you work with a real estate agent who’s your friend or a family member?

This is such a common question. And it can be a touchy, awkward subject when you know a real estate agent and are planning to buy or sell a house.

Part of you probably wants to ignore the topic. Maybe hire another real estate agent, sell your house, or buy a house, and hope your friend or family member just doesn’t notice or find out.

They will. And it will be more awkward if you do that. So, you should address this head on.

It probably feels like a no-win situation as far as you’re concerned. If you don’t work with your friend or family member, feelings will be hurt, and the relationship will be affected forever. On the other hand, if you do work with them and something goes wrong…feelings will be hurt, and the relationship will be affected forever.

No, the agent shouldn’t let it affect your relationship…not because they’re supposed to be superhuman saints…but they are human and it does hurt. And not working with the agent you’re friends with, or are related to will most likely affect your relationship on some level.

Sounds miserable. And, beyond your gut feelings and concerns, there seems to be so much information on the Internet, and in conversation, that points to it making sense not to work with someone you know…

  • What if the agent doesn’t do a good job? Will you feel fine firing him or her? Or just have to grin and bear it?
  • What if you decide not to buy or sell, and waste their time? You would feel bad…
  • What if you simply don’t want your friend or family member to “know your business” or finances…

OK, fine. All valid concerns and reasons. People use these excuses. And it can make sense for you to avoid dealing with a friend or family member…if you have solid reason not to.

But those types of reasons are easy to find elsewhere. You can feel validated and “right” by all the stuff you see online, or hear out of the mouth of some random random real estate agent who’s trying to convince you to work with him, instead of your friend or family member.

Now that we have your concerns out in the open, let’s focus on why you should hire your friend or family member. Because there’s a lack of articles pointing out why it should make total sense for you to work with a real estate agent you are friends with, or are related to.

Here are some valid reasons for listing with your friend or family member:

  • TRUST – The entire basis of the relationship between a real estate agent and their clients is that it’s a “fiduciary relationship”. Simply put…it’s a “trusting relationship”. You really ought to be able to trust a friend or family member, above and beyond someone you don’t even know. If you can’t, well, then you shouldn’t hire the person even if they’re your friend or are related to you.
  • ABILITY –  If your friend or family member is a great agent, and is as good of a choice, if not a better choice than someone else who simply fits the bill because they aren’t your friend or family member…hire your friend or family member. Hiring some random, lesser skilled agent doesn’t do you any good, other than to avoid awkwardness.
  • APPRECIATION – This is such a loaded subject. Real estate agents hate this issue more than you do…more than you could ever imagine. They’re constantly bracing themselves to have to deal with it at some point. If you simply talk openly about this subject with the agent you know, and show that you understand their dilemma, and feel for them, you will get some crazy appreciation from the agent. And that crazy appreciation can translate into some awesome care and service.
  • COMPASSION – This is something most agents don’t want to openly say much about…so, let me say it for them. The agent you know probably really needs your support and for you (and everyone else they know) to hire them. This is a tough business. It’s highly competitive, and it’s hard to make money…not even lots of money. We’re talking just-surviving-in-the-business type of money. So when someone an agent knows uses someone else just to avoid any weirdness, it hurts. It hurts their heart, and their bank account. (And just because an agent isn’t getting filthy rich in this business, and needs as much business as possible, does not mean they aren’t a great agent who will do an awesome job for you!) So, have some compassion and help the agent you know, instead of some random agent you don’t really care about.

You are hiring somebody’s friend or family member anyway.

Go ahead and ask any real estate agent you don’t know if you should work with a friend or family member. But if they even sniff that you’re thinking of buying or selling, and they have a shot at business, they’ll probably give you so many reasons not to. Of course they will.

But that’s a double edged sword. Be leery of a real estate agent who pushes that angle too much, because that agent is someone’s friend or family member, and rest assured, they don’t have that same perspective when it comes to their own friends and family.

Use your own head, and your own heart to make the decision. Make it as much of a business decision as possible, but do take into consideration that there’s some amount of being a kind human that needs to be considered.

Before you hire someone else, at least sit and chat with your friend and family member who’s a real estate agent.

Better yet…sit with them now, before you’re actually buying or selling, and chat about real estate. More specifically, chat about their career. Get to know how they work, and are as an agent. So you can not only hire them when the time comes, but also so you can refer them as much business as possible starting now. They’ll surely appreciate it!

And, if you can’t possibly see yourself working with the agent you’re friends with, or are related to, at least ask them to refer you to another agent, before you just go finding a random one on your own.

3 Reasons You Shouldn’t Hire The Agent With The Most For Sale Signs In Town

Posted on by Ali Palacios - Broker

You want to hire the best agent when you sell your house.

You see real estate agent “John Listalots” all over town. His signs are everywhere. So, you figure he must be a great agent.

It seems like he sells almost everything in town, and you figure that he probably “has all the buyers”.

From an outsider’s point of view, this makes sense…

What better way to gauge and choose the best agent to list and sell your home?

You have the evidence in front of your eyes. So many other people have chosen him to sell their home, how could it not be true?

Something you should know…

Before we get into the three reasons why you shouldn’t just hire the agent with all the signs around town, there’s something you should know.

Very few real estate agents do tons of business. In any given area, there’s always an agent or two who seem to do all of the business.

But that doesn’t mean that the few agents who do most of the business, are the best agents.

Nor does it mean that the agents you don’t see doing much business are not the best agents.

There’s a difference between “top” agents, and “best” agents.

The “top” agents aren’t necessarily the “best” agents, who will do the best job for you, and get you the most money for your home. (But that isn’t to say they can’t, don’t, or won’t either.)

It’s just to say that you can’t judge an agent by the number of for sale signs they have up in town.

Don’t hire a real estate agent just because they have tons of for sale signs around town.

And, don’t not hire an agent who doesn’t have a lot of for sale signs around town.

The 3 reasons…

1. Appearances can be misleading.

Just because an agent has tons of for sale signs up around town all of the time doesn’t mean that the agent is selling them all. He might only sell half of the houses he lists.

And, the ones he does sell, he might not necessarily sell for the highest possible price.

Maybe he does. But maybe not. Just don’t base your decision off of appearances.

You might be better off hiring an agent who doesn’t sell lots of houses per year, but gets them all sold, and for the highest price possible.

2. Time and attention.

An agent who has lots of listings on the market could very well not have a whole lot of time and attention to devote specifically to you and your house.

Again, maybe he or she does manage to pay close and careful attention to every single one of their clients. But maybe not. In fact, there is a good chance an agent doing so much business cannot pay you lots of attention.

You might be better off hiring someone who has less listings, and can devote a lot of time and attention to you and the sale of your home.

3. They are too good at selling.

An agent who is good at finding and getting so much business is likely a very good salesperson.

But what are they good at selling? Maybe they do sell a lot of the houses they list, and quickly…

Does that mean that agent did the best job and sold it for top dollar, or is it that the agent is good at selling their own client on agreeing to less than the best price and terms? Could they get more for their client? Is the agent pushing his or her own clients to do things, just to make a quicker sale, or a sale at all?

Almost impossible to prove. And not necessarily the case with a top producer. It’s just food for thought.

And it’s food worth chewing on…

Because so many great real estate agents, who take a tremendous amount of care in getting their clients the absolute best results, get overlooked simply because they aren’t the agent with the most for sale signs up around town.

Don’t overlook the best agent in your area, by just hiring the top agent in your area who has the most signs.

Dig a little. Ask around for that local agent who happens to be the best kept secret. And when you find one, don’t doubt your choice just because they aren’t the top producer. Trust him or her, and let your agent do the best job possible.

Why You Actually Need To Hire A Buyer’s Agent When Purchasing A Home

Posted on by Ali Palacios - Broker

When you first start looking at houses to buy, you’re probably looking to find the best house possible…not looking for the best real estate agent possible.

It usually begins innocently enough…

Maybe you see a house online. So, you reach out to the agent with the click of the button. Or send a quick e-mail. Perhaps even pick up the phone to ask a few questions, or schedule a showing. Next thing you know, you’re being sent listings by e-mail, and going out to see houses with that agent.

Or, maybe you go to open houses and meet a bunch of different agents, and eventually just find yourself working with one of them. (Or several of them at the same time.)

You might be a little bit more deliberate about finding an agent, though. And you might choose to work with one who you have seen who has lots of signs, ads, or billboards. It might boil down to choosing an agent because everyone seems to use that particular agent.

But too many people just sort of stumble into working with a real estate agent by chance.

It’s not the best way to “hire” a real estate agent when you’re buying a house, but it’s pretty typical. Life is busy, and there isn’t any true process to finding the very best real estate agent.

So, the point is this: for most people, stumbling into a relationship with a real estate agent is just how it goes.

So, what is the point of the article then? What is the solution? What should you do?

First things first…

Make a concerted effort to find and choose the real estate agent you work with to buy a home… before you actually start looking at any homes.

While it’s natural to be excited to find the home you want to buy, when you do that first, you are skipping a worthwhile step.

Instead, you should ask friends, family, coworkers, or whoever else you know, for recommendations and referrals.

Then, meet with, and speak with a few agents. Get a feel for how they work. Determine whether you trust them, and whether they seem like they know what they’re talking about and doing.

Once you find one, actually hire the agent…

When you find one you like, hire that agent. Commit to the agent. Work solely with that agent.

Too many people feel like they should have several agents helping them find a house. Yet, all the agents have access to every home on the market. Every agent can get you in and show you the houses.

But not every agent can represent you, your needs, and your best interests the same. Some are better at handling the ins and outs of the process. And better at analyzing values, and advising you. And, of course, some are better at negotiating.

It isn’t about having several agents out there looking to find you some needle in a haystack. Or an agent who is willing to jump to show you a house the minute you call about one. It’s about having one that is solid and skilled representing your interests with their knowledge and skills, once you do find the right house.

And an agent that good isn’t likely to spend a whole lot of time or attention on you if they don’t feel that you are being loyal to them, or aren’t serious and committed to them, and the process of buying a house.

The best way to show them you are all of that, is to literally hire them. Sign a buyer’s agency agreement with them. Show them you are committed to him or her, and the process, by committing to them.

Why should you?

Most people, even some real estate agents, may tell you that you should never sign a buyer’s agency agreement and thereby hire a specific agent.

And you don’t have to. So many agents will work without requiring you to do so. You can get the milk for free, as they say…so why buy the cow?

Because…you aren’t “most people”. You know better.

If you don’t specifically find, choose, and hire a specific real estate agent to work with, you will possibly find one representing you by default.

It could be one that you meet at an open house. You just go to see the house. You love it. You want to make an offer. And, boom, the agent that was there is now representing you and your best interests.

Maybe that agent will be great. Maybe not.

And even if the agent is good, it isn’t like that agent will have a whole lot of background with you, or insight into you and your needs.

This can make the whole process not so great. You can find yourself feeling at odds, or working with someone who doesn’t seem to be fighting for you, so much as convincing you to do what they want you to do so they can make the sale.

That isn’t necessarily going to happen. But it can…and does…to so many people. To “most people”.

And then “most people” complain about how horrible their experience was buying a house.

Here’s the kicker…

The reason why people complain that their home buying experience is often not great, is because the client and the agent do not have a committed relationship!

The lack of commitment actually causes mistrust, and less than ideal dealings.

Yet, most people go about it that way.

So, solve the problem most people have by actually seeking, finding, and hiring the best real estate agent you can find to help you buy your house.

Don’t just stumble into a loose relationship with someone you need to trust to get you the best house, at the best price and terms.

“Got Any Hot Deals?” Read This Before You Ask That Question To An Agent

Posted on by Ali Palacios - Broker

Psssst. Do you want in on a hot real estate deal?

How about a house that’s already underpriced, and is being overlooked by every buyer in the market? And the owner is super motivated. Desperate even. And would probably take even less than they are asking already.

Just by buying it at such a low price you’re going to make money. But, if you put a few bucks in, you’ll make way more money. And quickly.

So, what’s the secret? How do you get in on such a hot deal!?

Apparently, a lot of people think the road to riches is paved with one carefully worded question…

“Got any hot deals?”

If real estate agents had a dime for every time they hear that question…

You can certainly try that approach. Ask every real estate agent you meet that very question. But it probably won’t get you in on any hot deals.

It’s not a bad question

It’s not that it’s a bad question. There’s nothing wrong with asking a real estate agent if they have any hot deals.

But, it can be aggravating to agents. And, even if they do know of any hot deals, it probably won’t do you any good.

Because reality.

Be in the market, not asking about it

First of all, who doesn’t want a good deal? There are always people in the market, ready, willing, and able to scoop up a good deal.

So, if you find yourself asking this and there isn’t a hot deal to be had, it’s because there are people actually, and actively in the market buying the deals. Some are just people looking for their own home, recognizing a deal when they see one, and grabbing it. Others are investors who are constantly on the lookout and in a position to buy deals when they see them.

So, if you’re just asking if there are any hot deals, it won’t do you any good. Unless you happen to be absolutely ready to pounce. Meaning, you have money lined up. Whether it’s in the form of financing or cash.

But it also means you have to be mentally ready to pounce. If you ask, and an agent does bring you a hot deal, you need to be ready to go after it…not wait to see if the price goes down more, or “posture” and wait for the seller to come groveling to you to make an offer, any offer. Or, just wait to see if another better deal comes along.

So, it’s perfectly fine to ask agents if they have a hot deal, but you need to be ready, willing, and able to do something about it. Otherwise, you can ask every agent you ever meet the same question, and it’s not going to get you anywhere.

Simply put, you need to be one of the people in the market… not just asking about the market.

Align with an agent

It might seem to make sense to ask every agent you meet if he or she has a hot deal.

But it doesn’t really work that way.

This is probably an issue of how the question is worded, and some misunderstanding.

It seems that when people ask this question, they’re asking the agent if they have a house listed that is a good deal. This doesn’t make a lot of sense. If an agent is listing a house, they should be attempting to get the highest price possible for their seller. Not getting a buyer a good deal.

Sure, there may be agents who play in the sandbox that way. But most don’t and won’t. So the question is a bit insulting, and totally aggravating.

That same agent can find and get you a hot deal…But not necessarily one they personally “have”.

They can find you a hot deal listed by another agent. And they probably would love to do that for you. But you need to be aware of the reality that the hot deal they can bring you to is likely not their listing, and not necessarily something they can pull out of a hat for you in that very moment.

They will need some time to scour the market for a hot deal. After you give them some information.

A “hot deal” is relative

Just because something is a hot deal, doesn’t mean it is a good deal for you…and your abilities, wants, and needs.

If you go around asking every agent you meet this question, they’re going to sense it. Having an army of agents all you on their mind for the next great deal just isn’t going to pan out.

Agents want and need to know they’re spending their time wisely on someone.

So, if you truly do want in on a “hot deal”, you should find and align with one agent (singular). Actually sit down with him or her and get into what you can actually do something about.

You can’t just say that you’re open to anything as long as it is a deal…and you’ll figure out how to make it work. And then expect the agent to spend a concerted amount of time and attention on finding you deals. Because the agent (unless they are new or desperate) probably won’t invest a whole lot of time or care truly finding you a good deal.

You need to show your sincerity, and your actual ability to an agent…at least if you want good attention from a good agent. And you should. So, align with the best agent you can.

There’s always a “hot deal”

A lot of the “hot deals” aren’t obvious.

The hot deals are made, as much as they are found.

And the best way to find and get a hot deal is not by offhandedly asking if an agent has one, but by being in the market, aligned with an agent, going out and making a hot deal happen. And, once in a while, just being in the right place, at the right time…but also being ready, willing, and able to scoop up the deal.

7 Budgeting Tips To Help You Buy Your First Home in 2018

Posted on by Ali Palacios - Broker

So you’ve decided to purchase your first home in 2018. Congratulations! Purchasing a home is a huge decision, and it can be one of the most exciting and rewarding experiences of your life.

But purchasing a home requires capital, and if your savings account is looking a little trim as we wrap up 2016, it means that you will have to do some budgeting in the upcoming year to make your dream of being a homeowner a reality.

Here are 7 budgeting tips to help you buy your first home in 2018:

1. Track Everything You Spend

You will not be able to make any major changes to your budget if you don’t have a firm understanding of how your money is being spent. Tracking everything you spend for a month will show you exactly how much you’re spending, where you’re spending it, how much of your budget is going towards necessities and how much of your budget is going towards luxuries.

You can keep track of all of your expenses in a spreadsheet, but a better strategy is to use a spending tracker like Mint or Prosper Daily (formerly BillGuard). These apps link to all of your accounts and will track and categorize your spending, making it easy to visualize where your money is going.

2. Identify Areas To Cut Back

Once you know where your money is going, it’s time to identify the areas where you can cut back and save additional funds to put towards your down payment. Every household will be different, but when you’re saving for a house, anything that’s not a necessity (like rent or medical insurance) should be considered an area where you can cut back.

Things like eating out, daily Starbucks and an expensive gym membership are great, but they can quickly eat into your budget. Cutting back on extra spending is a great way to build your savings and get you into your new home faster.

3. Create A Budget

Creating a budget – and sticking to it – is one of the best things you can do for your finances as you’re gearing up to buy your first home. There’s nothing more frustrating than having a savings goal and consistently falling short each month because of thoughtless spending. Having a firm budget (and holding everyone in your household accountable to it) helps you stay on track towards your savings goal.

Create a budget that includes all of your set expenses (like rent), the amount of money you will put into your savings account each month and allowances for categories like food, entertainment and gas. Then, stick to the budget no matter what.

Having a set amount for how much you can spend on things will make you think twice before pulling out your wallet.

4. Get Your Score Up

One of the most important factors in the home buying process is your credit score. Your credit score (and the credit score of your spouse, partner or co-buyer) will directly affect the interest rates on your mortgage, and a good credit score can save you thousands of dollars a month.

If you can, work to bring up your credit score as much as possible before you apply for your mortgage. Pay down any outstanding credit card debt, check your credit report for inconsistencies and always pay your bills on time.

5. Practice Paying Your Mortgage

When you create your budget, you should have an idea of how much you can afford to spend on your mortgage payment when you buy a home. But you shouldn’t wait to buy a home to start making that payment, particularly if it’s higher than what you’re currently paying in rent.

Practicing your mortgage payment will give you real life experience of what it will be like to make that payment each month. Take the difference between your current rent payment and your projected mortgage payment and immediately put it into savings at the beginning of the month.

You might find that you overshot how much you can afford and your projected mortgage payment puts you under too much financial strain. Or you might find that you actually have more wiggle room in your budget than you anticipated and can afford a higher mortgage. Either way, that’s information you want to know before you lock in a 15 or 30 year payment.

6. Pay For Everything In Cash

It’s easy to lose track of how much money you’re spending when you put everything on a debit or credit card. With just a quick swipe, you have everything you need. But paying for things in cash can make the purchase feel more real and can help you get a better handle on your spending.

At the beginning of the week, take out all of your spending money in cash. Then, make a commitment to only use the cash in your wallet to cover your expenses. If you run out of cash, that’s it.

Seeing your cash dwindle as the week goes on will help you visualize how much money you have left for the week and can help curb needless spending.

7. Reward Yourself

There’s no way around it – saving money is tough. It’s important that you reward yourself for your successes and for moving towards your savings goals.

Set milestones for your savings goals (like saving $1000 or paying off an outstanding credit card balance), and treat yourself when you hit that goal. The reward will give incentive to keep going when things get challenging.

One trap you’ll want to avoid is rewarding yourself with something large, extravagant and expensive. Rewarding yourself for saving money by spending money isn’t a recipe for success! Your reward should be something low cost (or free) that still feels like an indulgence, like a picnic day at the park with your family.

With these tips, you’ll be well on your way to signing those closing papers, getting your keys and making 2018 the year you purchased your first home.

Are you financially ready to buy a home? Your Cash

Posted on by Ali Palacios - Broker

Are you financially ready to buy a home? Your cash

There are several expenses incurred when buying a home. These are expenses that must be paid before, at closing and after. It’s important that you have these funds ready and available once you start the process.

Some of these funds may be gifted but check with your lender. Some lender will ask for a letter stating that the funds are a gift and not a loan.

Before you glance at the numbers below and disqualify yourself, please note that there are down payment assistance programs available that can help with a large portion of these funds. Ask me more about these programs.

Below you will find the closing costs for a home purchased for $150,000.00 and using an FHA loan.* This is just an estimate. Exact figures will vary based on your closing date, lender and title company.

  • Home Price – $150,000
  • Down Payment – $5,250
  • Interest Rate – 3.750%
  • PITI (principal, interest, taxes and insurance) – $1,238



Prepaid costs: Prepaid items are always required at loan closing, whereas escrow accounts are only required in certain cases. Even if you close your loan right before the month’s end, you owe your lender at least a few day’s worth of mortgage interest. This is because your first mortgage payment isn’t due immediately after you close. It is generally due on the first day of the second month following your close. You owe prepaid interest through the end of the month in which you close. Additionally, you generally have to prepay the first year’s premium for hazard insurance and mortgage insurance if your lender requires it.

Escrow: Escrow accounts are generally required by the lender if you put less than 20 percent down on your home, or refinance with less than 20 percent equity. An escrow account ensures the lender that property taxes, mortgage insurance and homeowners insurance will be paid. Requirements for escrow reserves serve as a cushion and vary by lender, according to the Department of Housing and Urban Development. The amount a lender collects also depends on when the closing takes place. Most lender will make the equivalent of 3 months of taxes and insurance

Earnest Money Deposits: This is a cash deposit attached to you purchase offer. The amounts of this deposit varies but expect to pay at least 1% if you are financing the balance and maybe as high as 10% if you are paying cash. Although earnest funds are not required they are expected. If your offer is accepted and you proceed with the purchase, this deposit is applied towards the purchase of your property.

Home Inspections: Every buyer should have their home inspected. This is usually done within 10 days of the executed contract. The cost will vary based on the inspection completed. The most common inspections are a general inspection that may run approximately $450 and pest inspections that may cost approximately $150.

In some cases you might have to inspect the foundation, a water well, a septic tank, etc. and these all have a separate cost.

Option Fee: This is a fee that is paid to the seller for the ability to have your inspection period. This fee will allow you to inspect the home within a given amount of time and back out of the agreement if you do not like the results. The fee varies but typically runs $100-300 for a 10-day period. Money well spent if it allows you to back out of the contract as a result of a bad inspection.

These funds can be created to the purchase of your home if you proceed with the contract; if you decide to back out, your forfeit the funds.

Appraisal: If you are financing your home purchase, the bank will want to appraise your home. The purpose of an appraisal is to make sure the home you are purchasing is worth the amount you agreed to pay. The bank will not want to finance 100K for a home that is valued at 80K.

Appraisals typically cost approximately $400. Sometimes this balance is paid in advance and sometimes it is added to the closing costs and paid upon closing.

Down payment: For most people the minimum down payment will be 3.5%. This only applies to FHA loans.  There are some exceptions for low income down payment assistance programs and VA loans require no down payment.

For a conventional loan a minimum of 5% is acceptable for borrowers with excellent credit but that said, anything under 20% will require the borrower to pay private mortgage insurance. This additional, lender’s insurance policy will just add to your overall monthly payment. It’s always best to pay at least 20%.

Mortgage origination fee and title insurance: Loan origination fees will vary from lender to lender but typically it can run from 1-3%. This is typically paid at closing. The owner’s title insurance is a negotiable expense and may be paid by the seller. Your real estate agent can help you with that negotiation. The cost will vary based on the cost of the property.

It’s important to review the good faith estimates that your lender provides. The good faith estimate is an estimate of your closing costs.

Other possible closing cost: Loan policy and endorsements, record warranty deed, record deed of trust, courier fee, escrow fee, tax service fee, one year homeowner’s insurance policy, 2-3 month hazard insurance escrow, tax reserve, credit report, lender document preparation, flood certification, mortgage insurance premiums, misc. loan fees, survey, homeowners’ association dues, guaranty fee. It will be important to review the good faith estimate for these fees.

Moving Costs: Moving costs will depend on how far you will be moving. If you do it yourself and you are moving locally it may cost you approximately $1000 for truck rentals, gas, moving supplies etc. If you hire movers and again move locally, it may cost $2,500-$6,000 for the average 2000-3000sf home. Long distance moves will cost much more.

Don’t ignore this expense. Price out the move before closing so you can be prepared for the cost.

Other Home Purchases: If you are moving from an apartment to a single family home, you will need to buy a few items after closing: lawn mower, weed eater, window treatments, furniture, etc. Normal maintenance items such as air conditioning filters, light bulbs, season lawn items etc.

Once you are a homeowner you will find that there are countless things that you can do to your home and most of them will involve cash. Some of these items can be improvements and some can be needed maintenance. Make sure to always have cash reserves to cover these maintenance. Maintaining your home, is maintaining your investment.

If you have any questions or if you would like assistance in buying, selling or renting give me a call. I’m happy to help.

Why Do Real Estate Agents Ask If You’re Pre-approved?

Posted on by Ali Palacios - Broker

Have you ever walked into an open house, or called a real estate agent about a listing, and within minutes, they’re asking you if you are “pre-approved” for a mortgage?

If you haven’t, then you have never walked into an open house or called an agent. Or at least enough of them…

Just wait. It’ll happen.

And you’re going to feel like it’s pretty pushy for them to ask that.

It’s like a joke.

It makes you feel like telling real estate agents this knock-knock joke…

You: Knock-knock.

Real estate agent: Who’s there?

You: Nunya.

Real Estate Agent: Nunya who!?

You: Nunya business if I’m pre-approved or not! Just show me the house, and I’ll get pre-approved if I even like the house. I can definitely get approved for a mortgage. Probably way more than this stupid house anyway. So, stop asking if I’m pre-approved.

Try it…maybe the agent will laugh! Or, maybe not. Depends…

But it’s no joking matter.

It depends on the agent. Agents have different personalities. They all come across different ways. They all handle how they meet, greet, and chat with consumers in different ways. There’s no one way to “be”, as a real estate agent.

But every single real estate agent should be asking you if you’re pre-approved. But many do not. Because they feel like it is a bit pushy and forward. Because he or she worries about offending you. But they should ask…

…because it’s entirely relevant for them to know.

…because it’s entirely important for you to be pre-approved.

It might come across as a pushy, or invasive question. Maybe that is because of how an agent asks the question. Or when the agent asks the question. Or, simply because you don’t know that it’s a question that should be asked.

But it is not a joking matter.

And you should expect the question, be prepared to say that you are pre-approved, and…you should actually want the agent to ask you that question.

It’s not like a first date.

If you were going on a first date with someone, and one of the first things the person asked about was how much money you make, and can you afford the date, you’d feel like that was pushy and weird.

Rightfully so. You don’t go in for a kiss the minute you meet each other, let alone ask for a hand in marriage. There’s some build-up.

Beyond that, there’s some time that needs to be spent together before probing questions about finances are asked. That kind of stuff comes way after even the first kiss, because finances are a pretty private, intimate subject. Even more intimate than a kiss…

Which is why it seems so invasive when an agent you’ve just met asks you if you’re pre-approved. It feels like they’re asking you some pretty private, intimate stuff that’s none of their business.

But asking for a pre-approval isn’t like going in for a kiss. It isn’t a marriage proposal. And it isn’t probing on the part of the agent.

It is a necessary question, and an important piece of information for the agent to know. And for you!

Why does an agent ask you if you’re pre-approved?

Agents aren’t asking you if you’re pre-approved because they’re looking to size up how much you can spend. (At least not most agents…)

They want and need to know that you are serious, and qualified to buy a house.

And they certainly have their reasons for wanting to know…

  • Real estate agents need to make sure they’re working with someone who can actually buy a house. They don’t get paid until and unless the person they’re working with buys a house. So, this is a matter of being careful about who they spend their time with. It might sound selfish…but you can’t fault them for that. They’re in business. Nobody cuts them a paycheck. And showing people houses is not a public service or charity work. Even working with someone who is pre-approved doesn’t guarantee them that they’re going to make any money. But at least it’s an indication that the person they are working with can do something.

  • Agents also need to know how much you’re pre-approved for in order to advise you as well as possible. Picture an agent showing you houses for weeks, and months. You finally find “the one”! You get all excited about the house, and you want to make an offer, only to find out then that there’s no way you could afford the house. This leads to heartbreak and aggravation…for both of you. It doesn’t do either of you any good to go through all of that only to find out you can’t afford the houses you were looking at…or even buy one at all.

  • And, to a degree, this is a safety precaution. You might not believe this, but agents are in a pretty risky position. If they just say OK to every person who calls and asks to go see a house, with absolutely no proof or verification of who the person is, that puts them at risk. Sure, a pre-approval won’t necessarily stop an evil person from doing something, but this is a pretty basic precautionary request.

Why you should want an agent to ask if you are pre-approved.

Even if you have just started browsing for a home just a little bit, and haven’t gotten pre-approved (yet)…at least expect the question. Don’t be offended when you’re asked if you are.

In fact, pay closer attention to the agents who do ask if you’re pre-approved! The ones who ask make it easy for you to find a great agent to work with.

Because if they’re asking that question, it’s a good sign that they are thorough and thoughtful about how they do their business. That’s the type of agent you want to have on your side when you’re buying a house — one who’s careful from the get-go. One who pays attention to the details. One who isn’t going to waste your time any more than their own. Or allow your heart to be broken when you fall in love with a house you can’t do anything about.

And if you want to get some really good attention and service from the best agents you come across, don’t even let them have to ask if you are pre-approved…

Get pre-approved before you even start looking. And let the agent know you’re pre-approved before they even ask. You’ll set yourself apart from almost every buyer the agent has ever met.