One of the questions I get most often when meeting a new client, especially a first-time home-buyer is “Why do I need a pre-approval just to see this house?” Their reasons for not yet having one or not wanting to get one right away are endless, but include:
“I don’t want to ding my credit for no reason”
“We’re just looking”
“I’m still building my credit”
“We want to see what we like first so we know how much to ask for”
While I could address every concern and more individually, that will very quickly get into “TLDR” territory ("too long, didn’t read") and no one will get my message, which is an important one. Therefore, I have organized all the “excuses” I have heard into three main points and will address each of those instead:
Prove you’re a serious buyer
To Prove You’re a Serious Buyer
At the risk of offending their clients, or potential clients, many agents shy away from addressing the elephant in the room early on in the professional relationship, which is:
We don’t get paid until if/when you buy a house
Therefore, we are not (or should not be) interested in working with any less than a serious buyer. Our time is valuable just like that of any other professional and must be guarded accordingly. In addition to protecting our time, we must protect our sellers’ time. Many sellers have to make special arrangements in order to have their house shown, such as vacating the property during the showing, or removing pets and/or children who may get in the way of the showing. It is not fair to the seller to bring a line of strangers traipsing through their house who have no intention of buying it. Obtaining a pre-approval is the best way to show your agent (who is ready to bend over backwards for you) that you’re serious about buying a property and you have common goals.
To Protect You
In addition to protecting our time, ensuring you, as the buyer, have a pre-approval protects you as well. There is nothing worse than finding you that perfect house that checks all the boxes and you can already picture yourself and your family making it your own, only to find out you cannot afford it. If you don’t believe me, watch any episode of House Hunters. Unfortunately, many buyers have an unrealistic idea of what they can afford when it comes to home-buying and end up being nothing but frustrated and disappointed when they receive their pre-approval. While this can be upsetting, it is nothing compared to finding your “dream” home, falling in love and mentally moving your family in, only to find that it was, in fact, just a dream. Pre-approvals aren’t foolproof, but they are the single best way to guard against this heartbreak.
To Protect Me
Fortunately for real estate agents, the vast majority of buyers are legitimate, honest and harmless. But that doesn’t mean that criminals don’t abuse the system to commit crimes of opportunity. When you take a moment and really think about what agents do for a living, it goes against everything we are taught as kids. They literally meet strangers in (mostly) abandoned buildings alone for reasonably long periods of time with no back-up plan. There have been incidents where evil people take advantage of this dynamic to do evil things. One famous example is that of Beverly Carter, who was kidnapped and murdered while showing a house to client she had never met before in Scott, Arkansas in 2014. Another example is Lindsay Buziak who was murdered while showing an allegedly wealthy couple a house in an affluent neighborhood on Victoria, BC in 2008. Thankfully, these instances are incredibly rare, but they do still happen. When buyers produce a pre-approval, it gives agents additional peace of mind that the person they are dealing with is a legitimate buyer with no ill intentions.
So there it is, in a nutshell. We don’t do it because we are lazy (which I personally have been accused of) or trying to be difficult. We just want what is best for our clients, and for us. The home-buying process can be very difficult and frustrating at times, which is why there are processes in place to address the problems that we do have control over.