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Hi Cindy -- honesty and reality have to meet. Just because I want to be taller, handsome and very wealthy doesn't necessarily make it come true.
Kristen Correa, Broker
San Diego, CA
I don't use the term "afford".
I use the term "qualified".
I believe that buyers will understand when they know that they're not qualified to buy a property.
Works for me.
San Diego, CA
It is simple - the pre-approval prior to showing tells the whole truth.
Jillian La Rocque
St Thomas, VI
Pre-approval says it all.
just looking back through some of the old questions and answers, looks like you got some good replies.
Jillian La Rocque
St Thomas, VI
The numbers do speak for themselves. I always make it a point to speak with their mortgage broker and ideally if we can all meet then everyone is on the same page. There is no magic, pure numbers.
I have this problem as well ... no one wants to be the bearer of bad news ... except the Grinch! I usually do not use afford ... I use "comfortable". You have it easier because the banks pre-qualify buyers but here on my island they do not provide any paperwork to help agents determine whether a potential buyer can qualify for the home of interest. Prospects always put the cart before the horse by asking to view properties without even knowing the prevailing mortgage rates!
I try to sit them down and say, "You know what, I would love to go househunting with you but the property search would be so much more fun and easier for you if you sat down with a banker and discuss what monthly mortgage repayment that you are comfortable committing to. By doing so, you will avoid the disappointment of seeing a home you love that comes with a monthly obligation that will prevent you from affording icecream every week. :) It also will allow you to not settle for a cheaper property that does not meet all your needs when you could have been able to pay for another home that costs more."
People can get so offended when they feel you are telling them they are broke ... even more so when it is true! In essence, instead of saying you cannot afford, I ask, "Would you live comfortably with the monthly mortgage payment for this home?"
Hi Cindy. I like what you said, "I don't want them to give up saving and striving for a home." I think your natural reply is nice. Do you have a follow up schedule or system for the people who bought those mansions? She can be the same. Just check in with her until she qualifies. But me? I use my referral partners, loan officers, etc., to explain it. Also, those on such a tight budget need to be well aware the purchase is not all there is to it... a list of likely expenses after the purchase helps solidify your message of saving for the purchase plus save for the ongoing expense of homeownership.
Simple. Put the numbers down on paper. Information is our best resource. No one ever said real estate was easy. If it was everyone would own a home.
If they've been pre-approved for a certain amount and can't go higher than the pre-approval amount, it's a matter of reminding them and asking them how they plan to "raise" the extra money.
Add all the costs....show them what a down payment will do to their payment when they have one...add the estimates of utilities, taxes, maintenance etv. and subtract it from their monthly net....they will reach their own conclusion.
Cindy, well good for her that she has $10,000 saved for a downpayment. Many buyers in our area don't have close to that. We want a client to visit a lender to see what the individaul is pre-qualified for and go from there. If the housing is too high for their income we then have to go farther outside the area they want to live in if they are to buy a home that fits their budget. San Diego is expensive for sure!
Has this buyer been pre approved? Or maybe you are telling us that what she is approved for won't buy her squat in your market? If so try to direct her to another area. Get her in on a property search.
Hello Cindy, Most of that pressure should be taken off your back by a lender. Asking your client to get preapproval gives you at least some idea, and them, the price range they should be looking. Notifying the lender you will be looking for prequalification after an accepted offer will hold them closer to reality. Mark
I will not be the person delivering the news. The lender should be able explain all terms of buyers' choices. If they want to go up, they should find the solution to it.
Their lender lets them know
I would let the bank or the lender tell them.
We let their lender discuss that with them