Nevada Real Estate >> Las Vegas Real Estate Specialist: As a first time homebuyer, not knowing anything about buying a home, where do I start? Realtor or Loan Officer??

I agree with you Jeff.  and I always send my first time homebuyers directly to the BANK first!

Jeff,

Finding a "qualified loan officer" or "good Realtor" is the problem, not what came first "the chicken or the egg!"

Bill

I would love that they come to me as a lender, but in the end if they are handled right by either party, then it doesn't matter so much. Any Realtor worth anything will have them pre-approved before long, and will take that pre-approval as valuable info and work with it. I've found a good Realtor referring to me is even stronger then a self generated client.

By the way, I started hanging around Trulia much more often, (As we see each other ;) and when questions are so broad like this, I don't even waste my time. Some people will make 50 comments on the same question over there and make themselves look dumb.

Jeff, a good agent will send them to a great loan officer immediately.  At least that's what I do. 

Jeff,

I have had to deal with all kinds of situations throughout the years.  One thing I can say that I only recommend great loan officers, because those others screw up most of the times. And, yes, pre-approval is essential before we start the process.

I agree with you Jeff and have been blogging about speaking with a loan officer even when you THINK you may want to buy a home. There are many instances when I wished we had a few months to help a borrower with their credit, asset situation etc.. If we had that extra time, it would result in either an approval or a better rate/lower payment for them.

Great points - particularly in this market, buyers need to know what they can afford and be comfortable with their payments over the long term before they begin their search.

PATTY.... .  that;s good... I just don't see how a realtor can say, meet with me first and we'll go over some procedures. I know why... they want to get in front of that buyer first... but in reality, who should that borrower be talking to first?  thanks

WILLIAM... . that is 110% a huge problem, finding those good, qualified loan officers and real estate agents. Define good though..   ;o)  What is considered good and why. Seriously, this has been a topic on my mind for a week and I plan on writing about this in the next week.  thanks

STEVE.... . yea, if handled correctly... but this is not always the case. I am not looking for perfection... but at least be on top of your game, such as yourself.  The question is, why is a realtor wanting to do a buyer's presentation before that borrower is qualified?

STEVE again... .  it was good to catch up with you a few minutes ago...  yes, it irks me when the same answer is given by 10 people. Hey, we know why...  it's free advertising to get their face and name in front of the borrower. But isn't it overkill at some point?  Thanks and talk later...

PATRICIA... .  I haven't received anything from you... lol  Seriously, I agree... hence why I wrote this post.  I am just curious.. why must a realtor sit and chat with the borrower first, before seeing a loan officer?  I will say this, you shouldn't be looking at houses.. and just for the fact, why even discuss what you might want and like.  Hell, I want a 2 million dollar house... but I know I can't afford it.

MARZENA.... .  that is great that you even have excellent loan officers that you feel comfortable. But just as I mentioned to Bill, comment # 2, what is considered great? Or excellent?  I will be writing about this in a week and sharing my examples of this.  thanks

ERIC.... . there are so many reasons why it's important to first speak to a loan officer.  I see some of the trulia answers from realtors that say.... call me and I will give you a great referral of a loan officer.  By whose definition?  That can be scary and dangerous at times. Who does one trust?  And why?  thanks

DAVID.... .  I am so emphatic about the fact that buyers need to be comfortable with their mortgage payment.  And it's always the first question that I ask... and when I got blasted from that one loan officer telling others that I was a used car salesman for even asking this question first... I was like, you have to be kidding me... and thanks for the compliment.

... standard practise for me my man... usually the first question after I shmooze them with my ultra sexy accent ;o)

lol !!!!

I usually talk to my customer about their needs and wants and describe that the first step is the Pre-Approval Letter from the lender is needed.  This helps the customer find a payment plan that best suits them.

I think it is a team effort and everyone involved plays an important role in helping this customer.

Based on what you told me, 3 out of 16 realtors have experience then the rest probably are new to the business.

That would be my conclusion.  An experienced agent would send the person to get financing arranged right off the bat.  If the customer twitches in any way shape or form then maybe they really are not ready to buy a home and just want to spend a day parading you around town to show them homes... I expect all clients to get pre-approved.

Pre-Approval is the First-step once they decide they are ready to buy! 

If they have just started thinking about buying, their is also a plethora of resources and info at the local library that they may read up on but they might get all their answers much sooner by contacting us professionals.

Thanks,

Tom Davis

Also comment #5 from Patricia... I tell them they can use any lender they want but let me send you to this great lender I've worked with a long time... I agree with you!  Nice job!

I was also just thinking that......   It could also be a matter of the agents trying to capture the buyer "To contact them" and then they refer them to the lender.

Not sure.

Thanks, interesting post.

Tom Davis

Jeff - I stopped using Trulia a long time ago, and I haven't returned.  I was amazed at how rude the other agents were to me.  I guess I'm just accustomed to AR and the culture of politeness that I've seen here overall.

Hey,

Jason Crouch makes another very interesting point!  Remember the true professional is experienced and "NOT RUDE" either! 

I think the experience level shines through in the agents who are writing those comments.

Thanks Jason for adding in that point!

Tom Davis

SHELDON.... . lol... Yea, the Secret British Agent...  and I am still waiting for that sexy accent when it says, "Go speak to jeff Belonger".  :o)   But thanks for the laugh...

TOM.... .  I agree, a pre-qual or pre-approval should be the first step. But I am semi confused...  why as a realtor are you wanting to go over that buyers wants and needs?  Couldn't this method be pre-mature, until the payment, costs of a mortgage, and a few other things get discussed first, which should come from a loan officer?  Just asking. But yes, we do agree that a pre-approval is the first step. thanks

TOM again.... .  I have no problem when a realtor believes in their referral source....but again, define great. How does one know?  I only bring this up because I had a realtor give me a shot, who had her client talk to her two other trusted loan officers. Well, these two other loan officers weren't good at educating the borrower about comparing an adjustable against a fixed.. how the adjustable works, and didn't ask about the borrowers goals, because many of my questions and answers had him going... "oh really?"... "wow, I didn't know this"...  he went with someone that beat me out by a 1/4%, but when rates went lower 4 days later, he still had the same rate.  Which meant that loan officer gave him a lower rate that probably wasn't going to happen. So... how good is your loan officer?  Just because they close the deal, doesn't always mean that they are that good. Just my opinion..

TOM again.... . yes, that is a thought of mine also....  hey, I will admit, who doesn't want to be first... in front of that buyer first... we all do... but how does one go about it at times?  thanks and thanks for the comments..

JASON... .  I don't care for the process and many of the answers. I think one reason why I keep going back for the punishment is to have someone give the right answers. I have seen some answers by realtors and loan officers answering mortgage questions, that were 110% wrong... and I cringe... sorry, it makes me sick at times. We aren't talking about slightly wrong answers... way off base type of answers... thanks

Jeff, great post and bookmarked for references....I agree...ensure your buyers have talked with a mortgage person so they know exactly what they can and can not afford.

First the good agent who refers to the good loan officer very early on....without a lot of time spent on the road (or with wants and needs).

If they are from the internet, or called in, I recommend that we meet in my office or somewhere to establish a relationship. To find out if we are a match and what it is that they are looking for.  Then I send them to the mortgage lender.

I'm more than happy to toak or meet with prospective buyers first, but I seldom go out to look at homes before they have a loan pre-approval from a lender I know and trust... EVEN if they come to me with one in hand from someone I don't know and trust.  I look at that loan pre-approval as evidence that they are qualified to buy a home AND verification that they are who they say they are.

I don't believe it makes sense to look at homes without knowing whether or not you're qualified to buy them and if you feel comfortable with the payment.

My best answer is "It depends!"  In my area, I have about six different lenders that I refer business to depending on the buyers needs.  Just like Realtors, good lenders know their niches.

• If you have 700 plus credit scores and 20% plus down, they can go about anywhere since anyone can do that loan including my least favorite internet sites;
• VA
• FHA
• FHA 203K
• First time home buyer
• State housing agencies
• Non profits that do housing assistance
• Rural Development
• Construction Perm Loans
• Portfolio Loans

I agree with finding out what one can afford (especially a first timer) . I always cringe at first timers that I inspect homes for that start crying about all the money they'll have to spend on repairs and  improvements they'll have to do to this vacant foreclosure they put an offer on only because its in their price range not realizing that theres so much more to home ownership. Most newbies that I inspect for should lower their sites to a smaller home in a lesser neighborhood in better condition, build up some equity and move up in 2 years.

First timers always need to go to a lender first, preferably one that deals with first timers alot. They are a very needy group and need special attention.

Buyers sometimes find the Realtor first, sometimes the lender. However, I think all professionals will recommend that the buyer seek professional attention on all fronts.

Well despite all the debate this is a bit circular. Home buying is not a linear process. A buyer needs to  maintain three tracks in his head:  (1) here's what I want (2) here's what I can afford (3) here's what I should spend. This is an iterative process.

I always talk to the person first in person if possible to go over their needs. I then suggest starting the loan process then as we begin to look.  After a while you get a feel for the people. I would guess one out of twenty that I talk to cannot buy due to finances.  

Jeff. Once again you will open the eyes of many FTHB'rs

Way to go!

Hold your horses.... why would you even look at a home, without knowing what you are qualified for or what it would even cost you

Exactly!  First time buyers need to know first what they can afford or want to afford - why confuse them with a bunch of homes and payments that they cannot even afford?

Great post, Jeff.

"I don't believe it makes sense to look at homes without knowing whether or not you're qualified to buy them and if you feel comfortable with the payment."

Well Said:  Nothing worse to a first time home buyer than to fall in love with a home they can not afford.....See a Loan Officer first.....

Note: if you have a close relationship and trust your Realtor ..... they can be a great source to finding a quality loan officer....:)

I believe the bank is the place to begin.  Having a great team with a banker, Realtor and client is the best attack!

REBECCA..comment # 17... . I know many realtors will say to talk to them first, ask questions, and then send them to the loan officer. Just one question to all realtors... Why?  Well,okay, two questions.. Then to ask the realtor, what would be the most important factor when buying a home?  In any case, thanks for the polite compliment.

JIM.... . I truly believe that good agent should just say... speak to my good loan officer and then get back to me when you are done.  But this is just my opinion.. thanks

DEBORAH.... . okay, finding out if you are a match, I could go for that.  But does it have to be in person?  Just wondering because about 90% or more of my clients in the last 4 years, I have never met in person.  And I would just say, hey Mr/Mrs Borrower... have you talked to a loan officer?  If not, here are the reasons why.  Here is a recommendation.  Get back to me when you have done this.  But many of us know why the realtor wants to spend time with this buyer, even before they speak to a loan officer...  they don't want to lose the sale. I don't blame them and I am not sure what I would even do... but being a loan officer of 17+ years... and from what I know... that buyer needs to speak to a loan officer before anything else is discussed... just too many reasons in my opinion for this.  thanks

MARGARET.... .  I can see your point. But not all pre-qual or pre-approval letters are an indication that buyer can buy a home. I can even tell sometimes by a pre-qual letter. And if you ask the borrower like 3 important questions to as if that loan officer asked them these questions, that can tell you a lot. Such questions as...  did they give you anything on paper that shows your total costs and payment?  Did they ask you about your goals?  And what loan program did they put you into and did they explain why.  I had a realtor tell my buyer, which is her buyer also, that USDA loans aren't the best to use because sellers aren't fond of them. And then goes on to say that even her loan officer says that FHA loans are generally better than USDA loans. Luckily this borrower came to me first, from reading my blogs and got the realtor after calling on a property that they were interested on. I got ticked off when the borrower told me that even the loan officer stated the assumption between FHA and USDA loans.  WHAT?  This borrower never even spoke to the loan officer and he can already make that judgment call?  I can safely assume by that loan officers comment that he was just not comfortable with USDA loans.... and this is sad, because this loan happens to be the best choice for this borrower for several reasons. Best of all, their mortgage payment is the cheapest out of the 3 major types of loans.. conventional, FHA, and USDA>..  and my biggest disappointment was the fact that the realtor even tried to get the borrower to shy away from the USDA loan... Mrs. Realtor... stick to real estate,.

Well unless you are a cash buyer, you aren't buying anything without a lender pre approving you. 

CHRISTINE.. comment # 21... .  I agree 110%, hence why I wrote about this. I have been seeing this practice less and less, that the realtor talks to the buyer several times and even discusses financing, before they nudge the borrower to speak to the loan officer. Rut row... if anything, in my opinion, the realtor should spend limited time with that buyer, until they speak to a qualified loan officer.   I know some realtors think they know that they can qualify a little... but crap, many loan officers can't even handle this properly, especially with the ever changing guidelines and such... so why does the realtor think they have this right?  Just very curious about this... thanks

PORGRESSIVE REALITY.... .   I can agree with this partially... yes, I know my FHA inside and out and I know conventional, USDA, and VA very well.... outside of that, everything else is limited... I have the staff to support me and help me on such loans as construction loans ... but as far as portfolio loans?  This is limited to usually stated loans and those that aren't US Citizens with hard to prove income. I was just talking to a good loan officer friend of mine today about this... we both feel that we as loan officers can't know everything... but a very good loan officer should be able to handle about 80% of all scenarios.  In my opinion, that puts me in the higher bracket of loan officers.  The bottom line is understanding the process... communication..  feedback.. follow up, knowledge... and if you aren't sure, you ask to make sure.  Just because someone knows a niche, still might not mean that they are better than good, because you still need the other elements, such as communication, follow up, ethics, etc, etc.  As mentioned, I will be writing about this next week.  Overall, I think one loan officer and lender can excell at 80% to 90% of what you mentioned.  thanks for your feedback and input.

RUDY.... . from reading your comment, it just sounds like the loan officer didn't properly prepare that borrower. I have written a few posts that talked about cash being king. Not only do you need to have money to buy a house and to move.. but you should have reserves to fix up the house or for emergencies.  This is not talked about much.  Thanks for the good feedback...

SCOTT.. comment #24... . yes, they need attention, but I will give all my borrowers the same attention. And that comes down to answering their questions day and night...  even if they have bought before. Yes, everone needs to feel like they are your only client and this is hard to accomplish. Many know that is not the case, but when you show that care, in a sincere and genuine manner, it goes a long way.  For me, it's all about how I set my clients expectations..  I have learned to set them to a certain level, so the borrower is well prepared.  thanks

VICKIE.... . I am not denying that many buyers will find the realtor first. My main point and question is... how much does that realtor hold onto that borrower and or talk to them about houses and financing, until they get them to a qualified loan officer. That was basically my hidden point in all of this. thanks

LESLIE.... . you make 3 very good points, and that I know many realtors could give that borrower some of the same information. But in reality, I don't think they should at all, not in the beginning.  They should allow the financing talk to be handled by the loan officer. Too many opinions and ideas then could cloud the borrowers mind and make it more confusing. Just my opinion on what I have seen and heard in 17 + years. Especially when a borrower comes to me after speaking to a realtor... and they tell me that they already know enough now, about mortgages, because of the realtor.  Sorry, but that kind of talk really scares me. I don't care what the realtor knows and or how long that they have been in this business. If the loan officer is that good, just one person and one person only. I don't go out and sell houses... or tell them which houses are nice or where to buy. Besides, who really has time to know both sides that well?  Especially with all the changes that happen off and on... thanks

ERIC...comment # 27.. . I understand about talking to the borrower, possibly getting a little feel for them and vise versa.. but my question to you would be... what questions do you ask them? What needs do you specifically go over?   thanks

TRAVIS.... .  thank you very much for that enthusiastic compliment and comment. I guess I can't stress enough that the mortgage payment should be the first and biggest focus on any real estate transaction.

VIRGINIA.... . yes, that would make sense, right?  lol  But seriously, I have seen many in the past that got excited over certain houses and then talked about financing. And I even knew several that forced themselves into such a house, talking themselves into the higher payment, just because they could qualify for it. How about all of those No Doc and Stated loans that buyers and loan officers abused, just to get that house of theirs...  thanks for the support and for the polite compliment.

STEVE.... . yes, many of us seem to agree with that.... and yes, I won't deny it, having a great team of a realtor and loan officer is always great. But then again, define good or great. I just want to stress to borrowers that not all referrals are golden, even if the person referring them to someone says so. It's just a sad fact that I can back up with more than just a few real life stories from past borrowers. I am sure we all have them.  And thanks for the polite comment.

PAULA.... .  Yes, and life would be just so perfect, wouldn't it.  ;o)  Seriously, don't get me wrong... I think a team such as the one you mentioned is a great thing... and I know some realtors speak well of their loan officer(s).  But I have been given a chance by some realtors as the 3rd loan officer and it has scared me on several occasions.  The other 2 loan officers, that the realtor said were so good because they close the deals and are very good with rates, in my opinion weren't so good. On several occasions, the loan officer just gave them that great rate, but after I spoke to the borrower, they still learned a lot. I am so into making sure that the borrower is not only educated about the process, but knows the ins and outs of what they are doing... and to discuss their future plans and goals.  This can be crucial for several reasons.  thanks

WENDY.... . well, that is the easy answer... ;o)   But you know how many buyers I closed in 2008 that were originally pre-approved or qualified by a loan officer and right before settlement, were denied... and most of it was either credit and or income issues.  I closed 8 buyers in 2008 and about 7 in 2009. These were borrowers that were promised and or guaranteed a mortgage, yet never made it to closing with that lender. And these numbers are only the ones that I closed... I talked to many others that either could not be helped, or didn't like my answers and seeked out another loan officer that would tell them what they wanted to hear.  And keep in mind, this was just what I came across.  I hear many different stories from other loan officers and realtors.  But do you know where I get the best stories from, yet it's really sad... from title companies / escrow officers.  Since they do the most closings, they see this happen even more all together. People just need to know that this does happen and that they need to shop with caution and when promises and or guarantees are made, that it should be a red flag.  thanks

I'm inclined to agree with you about where to start.  I wrote and posted an article on the same subject at Posterous.com on Jan  20, 2010, and have just reposted on my AR blog ("So You Want to Buy a House?").  I think whether starting with a real estate agent or a loan officer is a good choice.  I also think that these are the only 2 choices when first starting out.  If starting with a real estate agent, the natural course of action on the part of the agent should be to direct the prospect to the lender.  In the meantime, some dialogue should continue between the agent and prospect while waiting for the lenders determination.

Jeff - It is in my opinion that a Realtor(r) should not even attempt to do the Mortgage Lender's job as I believe the Mortgage Lender should not do the Realtor(r) job. It has always been a pre-requisite I guess you could say to have all my buyers prequaled before I put them in my car and show them houses. It is a difference of wasting their time and mine on a house they may not qualify for or in a price range they do not qualify for.

With that being said it amazes me at how often a Realtor and/or Buyer can be lied to and/or totally mislead by not only their Agent but the Mortgage Lender. You think you have asked all the right questions, dotted your I's and crossed your T's only to feel stupid in the end and question your very own professionalism and knowledge in the industry. One silly question missed and you could be a fish out of the water in a millisecond being left with " Why didn't I think of that " and wanting to shoot yourself in the foot !

If at some point you write out a list of " Questions to ask your Lender " I would love a copy of that. I believe THIS belongs in EVERY Realtors desk and HomeBuyer Package !

BTW - Your my hero !

Personally I think it should be a good realtor first...  After speaking with them fro only a few minutes, we can refer them to the loan companies we know will be there for them and song and dance them and us...

Any experienced Realtor will send a buyer client to get pre-qualified before starting to show properties... also many buyers already have a lending relationship with their bank or a mortgage broker... but every good Realtor can offer up the names of a number of reliable and time tested mortgage brokers, real estate attorneys, home insepectors, and contractors, just to name a few of the professionals needed to get it done... it comes with the territory... and odf course a buyer needs to know what he or she can afford comfortably... so a real estate buyer needs to interview and select pretty much at the same time a number of candidates to find:

1. a reliable and trustworthy mortgage broker or lender that can deliver
2. a knowledgable, attentive real estate agent that knows how to successfully negotiate the buying process
3. an experienced attorney that specializes in real estate

Nonsense!

The problem with buyers going out on their own and getting a pre-approval is that many times they just don't get the right thing. They usually get pre-quals because they don't understand the difference between a pre-qual and a pre-approval. If they come to you with an actual pre-approval and you have had problems with the lender, then that pre-approval can be pretty meaningless if you know that that lender has a reputation for not getting the deal done. At that point, even though the buyer does not have to go with that lender, they are many times reluctant to give their info to someone else, or to have their credit re-run, or to give up fees that some lenders in our area charge upfront to do a pre-approval, etc.

That being said, if I am contacted first, I always tell them to talk to a lender to give us the best starting point and explain how that step integrates into the entire purchase process (this is key), with several recommendations of my own that I know will get their loan processed, explain their program options well and that will communicate well with me throughout the process.

Alright Mr. Belonger, You and Lenn like to start some of the best timeless debates on AR.  Here we go again.

Last-  Quit looking at Trulia, it will drive you to drinking. 

:)

Great Post.

I haven't read every single comment here but aren't we forgetting the role the internet plays in all of this?  Most buyers, including newbies, have already looked online at virtual tours and pics before they ever make the first call to anyone.  They already have an idea of what they want and where they want it.  That is my experience, anyway.  My job as an exclusive buyer agent is to advocate for them every step of the way.  If they want to look at homes they've seen online while waiting for pre-approval or even before that, I have the opportunity to establish a relationship with them, give them helpful information and assist them in adjusting their expectations, if necessary.  Absolutely, the pre-approval has to be there before we get too serious - but I guess that's one of the perks of my job - I can spend more time with each buyer from beginning to end because I don't have listings and sellers to worry about.

Great post Jeff, you really do get people thinking when dealing with issues like this.

It seems this banter always results in a "who is most important in a real estate transaction" argument. The answer to that, unpopular as it may be, is the lender. Bottom line folks a buyer can buy without a Real Estate agent. A buyer cannot ever, ever buy without money!:)

That said I do agree with all the comments above that speaking to a good Realtor or a good lender will normally net the same result, regardless of who you speak to first. It's finding that qualified, professional and knowledgeable leader of the industry (be it Realtor or lender) that is the challenge!

Gerry Suarez, Jr.

Your FHA Loan Pro!

When I first started in the business I accompanied every buyer to the loan application. As it has become more electronic I guit all together. With first time buyers using the tax credit I have made that effort again to make sure that they don't take the credit and go immediately to the furniture store. We can't make people responsible but we need to give full advice to them. They do start with me but after a counseling session, it is to the loan app.

Boy, that's a tough one.  For first-time buyers I really would recommend starting with an experienced realtor first. 

Now, hold on a minute...let's first all agree that first-time buyers require a lot of hand holding and explanation.  From my experience, LO's tend to be a little more "factual" and a little less "warm & fuzzy".  First time buyers need encouragement & patience, not the strong suit for the numbers guy or girl (usually).

I think a little prep time before turning them over to the LO can go a long way in keeping them engaged in the process.  That being said, you still don't get to ride in my car & look at homes without being PRE-APPROVED.

All you LOs out there, don't take it personally.  My husband is an LO and I know what I am talking about here! 

Personally, I really prefer that my clients start with the lender. What's the point in looking at properties until they know exactly how much house they can buy?

I believe that meeting with a mortgage rep should be the first step. It is interesting the number of people who staunchly refuse to do this.

Of course, you want to get your prospects pre-approved before they look at homes.  However, I do prefer having contact with potential homebuyers at the start of the buying process.  Referring them to experienced - reputable loan officers will make their purchase and my job alot smoother.  The current market has "weeded out" alot of the "bad" loan officers (and agents!).  I know most of you have run across the loan officer that promises the happy ending, just to find out on closing day, they are still being qualified.  Never should of gotten that far into the process.  It is also my opinion that loan officers who issue the approvals to unqualified purchasers should be financially responsible for the expenses incurred by the parties.

Looks like everyone is on the same page on this one. Need to know what they can buy before showing them properties or it's a big waste of time for everyone.

Jeff: Good tips. Thank you. It seems most realtors defer to loan officers first for the simple reason that no one wants to waste their time and money with a customer who may not even be qualified. Take care.

Technically the banker should be one of the first individuals a buyer talks with when buying a home! The advantage of talking with a Realtor is that they can direct them to a lender that is reputable and will fit thier specific needs. If they come to me and are needing to go FHA it would be a national loan officer, If they have a considerable downpayment it may be a to a local bank that has the best rates. If they have some issues it may be a broker that deals with several banks and can do some things that a normal banker can't. So yes as soon as I get a lead I have them head to the bank but not with some tips!

When I would encounter buyers for the first time. I'd always warm them up by having them by having them talk to the lender...

Most first time home buyers actually do start with a realtor, either because they find the agent on the Internet or the agent found them through prospecting.  It is rare for a first time buyer to know that they need to get preapproved.  It does happen, but not often.

Here is my preferred sequence of events:

1. First contact with buyer.
2. I tell them I will have my lender call them to get preapproved.
3. The lender calls them on the phone and does a quick prequalification and arrives at a ballpark figure.
4. The lender meets in person with the buyer and does a full preapproval.
5. After the lender sends me the preapproval letter, I meet with the buyer for a full Buyer Consultation.
6. Buyer signs a Buyer Broker Agreement
7. We go see houses.

Jeff,

Thank you for saying what needs to be said.  Start with those who can guide you and assess what you need first - a reputable mortgage lender. 

And yes, reputable is the key word here.  Make sure that your loan officer listens to you and doesn't just shove papers in front of you to tell you what they are.  I just re-financed my house and the loan officer was great - courteous, informative, and best of all, patient.  He listened to me and never rushed me.  A good sign.

One caveat, though: I wouldn't necessarily base everything on what mortgage payment you'd be comfortable with, but what total mortgage amount you'd be comfortable with.  Because, as we've seen with some of the ARM and balloon mortgages, the payment can be whatever you want.  I could buy a new car and pay fifty bucks a month...for twelve hundred months.

Great find though; I'm surprised folks are advising new buyers to start the process by shopping for homes.  Seems very cart before horse to me.

Nick Sweeney
The DotLoop Team

Hi Jeff -- If a buyer contacts me first, I require them to get pre-approved with a loan officer I know and trust, if they don't have one already.  Buyers would do well to find a top-notch loan officer on Day 1.

I always advise first-timers to speak with a loan officer to get pre-approved.

I don't care if they walk in my door first or the loan officers, so long as they end up at the closing table with me. 

Jeff- As a professional Real Estate Broker, I firmly agree with your top three choice answers. 

I honestly don't think it matters one bit.  The first thing I do when I get new people is see if their pre qualified or get them pre qualified.  The only benefit to them coming to me, as a realtor, first is that they might end up working with one of the lenders I like vs. the ones I don't. 

I like and trust a few different lenders.  It makes my job so much easier if this person knows what they are doing and have good communication with the realtor and borrower.

Jeff--Missed your call today. It's been a hell of a day and I'm putting out some fires. Can I call you Saturday or Monday?

I agree to START WITH A LENDER. Too many buyers head off to look at houses, thinking they're qualified based on income alone, and are surprised/disappointed when they find the perfect house and have to scramble for a loan/lender.

You avoid all the surprises if you start by finding a lender you trust, and finding out how much house you really should be looking at right now.

Jeff - Let's remove the fact that an unqualified (not pre-approved) buyer should/shouldn't be looking at houses with a Realtor® from the equation for a moment.  For just one moment, let's pretend that's not the argument (we'll get to that afterward).

I'm a big fan of yours, but I'm not sure I can agree 100% with you.  Should they go to you or me first?  It doesn't matter if you ask me.  Why?  Because I'm not sending my clients to bad lenders.  I don't keep a list of lenders who do great work for nothing.  What does great work entail?  They close loans.  They close them on time.  They don't screw with the numbers and take advantage of my clients.  They are easy to work with (for me and the clients).  They tell it straight and aren't afraid to tell me and the client that it's not going to happen.  When they tell a client that, they tell them why and give them steps to rectify it.  They are the kind of lender I can call when I need help with the file.  They don't shrug my phone calls off and say "it's in underwriting, we're still waiting," they look into the file and see what they can find out.  They are excellent resources for both me and my clients - even when we're not currently getting a loan from them (one of my favorite lenders is always there to answer questions about loans in general when I don't know something - client or not).

If a buyer comes to me first, they're going to know about people like you.  My first meeting with a buyer is about as informal as it goes.  I make it a point that I want them to be comfortable working with me...and I need to be comfortable working with them.  I'd rather let them go if those two criteria can't be met.  So my first meeting with a prospective client is more about what they're hoping to do.  Working with me and speaking to one of the lenders I would recommend is about finding what they can do.

Now, of course, when it comes to pre-approval, we both know it's never a good idea for a Realtor® to be showing houses to a non-pre-approved client.  It's a waste of everyone's time (client and agent) as well as a potential heartbreak and building of mistrust for the client.  "I loved that $200,000 home and want that one...what do you mean I can only get a loan for $120,000?"  Not a good scenario at all.

As for Trulia, I'm an active participant, but always see some shocking things.  I try to avoid the drama.

Jeff - I should mention that I don't have a problem with the consumer going to a lender first.  I think some of what you're experiencing on Trulia is bruised egos...ie, we're the experts, not you (as in lenders).  I spoke to a lender friend of mine not too long ago about the disconnect between agents and lenders.  Sometimes both parties get too involved in the other side.  As an agent, we need to know as much as we can about mortgages, so we can easily get a "mortgage expert" vibe about us.  Lenders sometimes feel the same way about the agent's side of things.  Not every agent or lender is like this, but I've seen it enough to know it happens.

Just a FYI…  this topic is such a fine line. My main point was the fact after reading the question and then many of the responses, it felt like chum was thrown in the water and the sharks were circling.  Call me, meet with a great realtor...  start with a buyer’s consultation… etc, etc. But the question in my opinion wasn’t answer correctly.

Overall… I don’t have a problem with buyers speaking with realtors before they speak to a loan officer. But it’s the information that many realtors give to these buyers that are the job of the loan officer.  This is a fine line on who a buyer should speak to….  But if you have a good realtor and a good loan officer, even if they have never met and or talked before, and that borrower chooses them both?   Everyone should work together. But for those realtors that keep saying… my guy is great, cheap, and closes deals… just because that loan officer is all of that, doesn’t mean they are great. I find several of these great loan officers, that when I get a chance to compete against them, they don't educate the borrower correctly.  because so many, even realtors, are focused on rate and fees. More on this on Monday. But Please define great… please define cheap…  please define service… etc, etc.  Yes, these are our opinions… my whole point to this part is that not all referrals are as good as they seem to be. I know this… I get several borrowers a month that experience this, so this is not a story.  It’s a fact…  and that is where my frustration is at this moment and many of the basic answers that try to get the borrower, but those that lose site of the whole picture. Just my opinion & thoughts.

I will try and respond to everyone by tomorrow… thanks for the comments and input.

I absolutely knew that Lenn would not agree with this. I only wonder what took her so long to chime in.

Jeff, I completely agree with you.

I will only say that I understand WHY, if you are a first time buyer, you would rather look at houses than look at the numbers involved with buying the house.

It is WAAAAAAAY more fun, even if it is getting the cart ahead of the horse.

Jeff,

I'm primarily a listing agent but whenever I get calls from buyers that want to see home...the first thing I do is ask them if they've been qualified by a mortgage broker. If they say yes then I expect to see something in writing from them and or start dialog with that person just so we are on the same page. Most buyers will start their search on the net or in some sort of advertisement. So with most buyers both first time and even some that have bought before...it's natural for them to just want to go out and look and see things before they meet with the MB. I think it's more a euphoric feeling of wanting or dreaming of buying a home that they see. Some will jump ahead and want to feel it first. But I still don't like taking buyers out until they show me something that says they are capable financially to purchase in the price rage they are looking at.

It's a waste of my time and a waste of their time...bottom line is they should look at more than getting a great deal on the loan...they should look at the customer service..the communication...and of course how knowledgeable the MB is. Sometimes they just look at the low rate but it ends up biting them in the butt so sometimes it's better to pay a little bit more. I once had this buyer who's family purchased a total of 7 homes from me over the years and the last one the relative bought...they were basically coerced by another relative whom I never met to use someone who offered them this great deal for the first year but after that the rates were adjustable to a very high rate in the end plus they back-loaded the loan. It ended up being a terrible deal in the end just to get a cheap rate for the first year. I'm not sure whatever happened to them because they moved away but I think they ended up in foreclosure.

I would just tell a buyer to talk to more than one MB and get some facts on what they truly think they can afford.

Jeff- What a great, well-written post!  I am glad that there were so many comments to read after your post.  It was interesting to see the different responses.  I am still trying to understand what agent could possibly think that the answer is what the 3rd "bad" response was.  Maybe it was someone new to the business!  I really liked what Matt,#63, said.  I am in total agreement and I handle a new buyer the same way.  If I meet with a buyer and they have not been preapproved, one of the first things I tell them is that they need to talk with a lender to determine what price range of home will fit into their personal monthly budget, that they will qualify for.  I also caution them that many times they will be preapproved for much more than they are wanting to spend on a monthly payment.  I remind them to think about the total payment, including taxes, homeowners and PMI, if required.  There are some lenders and agents that are guilty of glossing over all of the monthly costs of owning a home.  A great lender that I refer to needs to have fantastic past client feedback, great communication skills, and a willingness to always put the client first and do what's right, not necessarily what's easy or "creative":)  I also greatly admire lenders that are willing to help a client that may need to take steps before getting financing navigate their way to being ready to buy.  Thank you for such a great post! 

One of the first questions I ask is if they are working with a lender and if so who it is and are they pre-approved.

If not I have a few people that our office works with that I will refer them to.

There is nothing more frustrating then having them find "their" home and not be able to afford it.

CHARITA.. comment # 36... .  even though my post that I wrote above might make many feel that I am stating that any buyer must first talk to a loan officer and not a realtor, is not the real case.  This had to do with a question that I saw on Trulia and because 80% of the comments where realtors sounding like advertisements, telling the buyer to call them, that they would take care of them.  I agree with your comments, and state that I actually don't have a problem with a buyer speaking to a realtor first.  But when the realtor starts to act like a loan officer and give mortgage advice... damn it, they need to stop. I am hearing more and more bad advice and crap from realtors, trying to give advice and 95% of the time, it's not even wrong, but way off course. thanks  PS.. please don't hesitate to link to the blog that you mentioned. I would love to read about it.

MELISSA.... . I know exactly what you are talking about and because you are going through exactly what you were talking about.  I am grateful that Brian Brady told me that you needed some help and that he told you to contact me. I am glad that I could help, even while a thousand miles away....  and thanks for the kind words... talk soon..

BARBARA.... . I know what you are getting at... but what about those realtors that do the same as the loan officers that you have described?  So my question to you, who gets to pick who? If it's a bad realtor that should talk to the borrower first and then refer their loan officer?  Ask Melissa Grant, above you, comment # 37.  She is going through that right now, that they went with a realtor first and then a lender... and this lender was referred to them by their realtor. 1 week later, all hell broke loose. My point... who is to day who should come first. Who does one trust?  That wasn't really my intentions of this post when I wrote it.  But I wrote it as such, to see what kind of response I would receive. It was more so because of how many of the realtors responding, sounded like seagulls down at the beach, waiting for that next piece of food.  You be the judge of it... here are the answers to that question on Trulia... thanks for your input.

PHYLISS..... . I would agree with your comment... but my question to you... who does the borrower talk to first though and why. They can't possibly talk to all 4 at once and interview them all at once.  That was one of the main points of this post. Sure, borrowers in more times than none will find a realtor first.  But when should the conversation stop and then be directed to a good loan officer?  I would say sooner than many would state.  But that is just my opinion.

MIKE.... . okay, good advice, but why 3?  I could answer this for you...  possible liability reasons on your part?  if one fails, you could say you gave 3?  I only say this because I have been that 3rd loan officer before and the other 2 that the realtor had faith in?  Because of what I know, I would run for the hills, after finding out what they did not tell or explain to the borrower. I will be harsh about this.  Just because a loan officer gives a good rate and will get the deal closed, doesn't always mean that they are that good. I would love to tell you on the phone exactly what happened, which might open your eyes some to what I am trying to talk about. please never hesitate to call me, even on the weekends.  thanks

LENN.... .   I think I know you well and I figured your answer would be like this, but I didn't think it would be one word. As I have stated in my comment and kind of what Matt first said in his comment... I don't truly have a problem with a borrower speaking to a realtor before me.  But it's everything else that a realtor says to that borrower, that should be handled by the loan officer. I know you know how to qualify, but in your own way. And it works for you, but it still doesn't mean that it's correct. Even many loan officers don't even know still... on how to qualify properly. Just because they make the money and have the money, and you start to show them houses... is this a good way to start?  Not in my opinion. Too many variables. - my comment # 65 - and Matt Stigliano's comment, comment # 63 -  Overall, this post was more directed to the responses by the realtors answering that question on Trulia. I felt like I was at the beach, watching seagulls flying above a borrower, waiting for that one moment. 

SUSAN.... . my problem with your problem is that many realtors and even loan officers don't know the true difference between a pre-qualification letter and a pre-approval letter. In most cases, the pre-approval letter is a dressed up version of the pre-qual letter. Do you truly know what a pre-approval letter should be?  If someone hands you a pre-approval letter, does it mean that it was approved by an underwriter or not?  I would love to hear your answer.

On another note... what is explained well?  What is a good loan officer?  As I stated to several others above, how does one define good loan officer?  great?  By whose definitions?  By what definitions?  I am going to try and write about this in 3 days or so.   thanks

GARY.... comment # 43 .... . I had stopped looking at the questions and answers on Trulia for several months.. But just lately, in the last 3 weeks, I am seeing so much garbage, that it is very scary. And I feel like I need to jump in from time to time. Yes, it many cases, I seem to be wasting my time. But the misinformation is worse than I have ever seen it and it needs to stop. How does one make something stop or to try and change something?  You need to set an example and start doing it yourself, hoping that others would jump in. thanks

It's funny how agents respond on Trulia. I have seen so many ethical violations it makes my head spin. So did you get a follow up email because you were good and challenged some of the answers.

Hi Jeff,

Always such solid advise can be found in your posts. This has been a practice of mine since I became a realtor 12 years ago.  I found out early on that many lenders will pre-qualify the buyer for more than they are comfortable with.  I thought I was the only one who asked that question but now I feel confident that it's the best way to begin.  Thanks for another great post!

Lisa

Jeff-

I like you posts and believe your a very competent LO.  

However,  I agree with Lenn on this one.  

JOHN aka True North Realtors .... comment # 44 .. . yes, I am well aware of the internet and how it has helped buyers shop for a home.  But you said this...  "If they want to look at homes they've seen online while waiting for pre-approval or even before that, I have the opportunity to establish a relationship with them, give them helpful information and assist them in adjusting their expectations, if necessary."

Here is my problem with that statement...  don't give in and tell the borrower what they want to hear.. or don't do what they want to do. You are the professional.  Explain to them the reasons why and not just what feels good. Sorry, but so many people in any industry tell people what they want to hear, or do what they want to do, in fear of losing them, that they will find someone else. I have found that there are ways to over-come this kind of attitude.  Just my opinion.

GERRY.... . absolutely will the answer not be favorable.  But let's be upfront and honest with people.. you and I would want the same. Isn't the saying that who has the gold makes the golden rule?  Well, who gives out the money to buy the home?  The lender...  work on that first, then see the house. For realtors that don't want to lose that borrower, fine, but keep quiet about the financing, let a professional loan officer handle this.  thanks for the compliment.

JOE.... . in all honesty, I don't have a problem with the counseling and such, so the realtor can keep that borrower. But nothing should be mentioned about mortgages, period. I still see many realtors give in depth advice and such about loans, or giving details about loan programs. No... please don't... it doesn't matter what you think your loan officer has told you.  Just my advice.  thanks

JENNA.... . you stated this... "For first-time buyers I really would recommend starting with an experienced realtor first."  

Why, just because of what you said that loan officers tend to be a little more factual and not as warm and give that fuzzy feeling?  Okay, will agree with some.... but aren't you making a judgment call?  Yes, you are. I can say the same about realtors also. So, does your statement still solve this problem?  No, in my opinion, it doesn't.  My real problem are those realtors that give any type of mortgage advice.. period...  as far as myself being warm and such... I know I am very warm and easy to work with and to talk to.  Just today, I had one borrower call me 6 times on my cell, knowing that I was at my nieces b-day party. When we first talked a week ago, they felt my warm thoughtfulness... and I was still warm and open to them today. I know what you are saying, but that was a general statement.  thanks

PAM...comment # 48 . ... . I agree, hence why I wrote about this..  and yes, I don't have a real problem with a borrower first talking to a realtor... but it's how some realtors talk to that borrower, that scares me.  thanks

MARK.... . yes, it is amazing on how many are against this... but from your experience, should it surprise you?  It doesn't surprise me, because after 17 years, I have met sooo many.  thanks

VICKI... . the same could be said for that realtor that talks negative about their choice of lender, just to refer them to their own lender. Yes, it has happened... and then the loan officer low balls my interest rate, even if it couldn't happen. But do they get the same or better service? More knowledge?  A better program?  Maybe, maybe not... so who is the realtor helping then?  The loan officers pocket and not that borrower?  What happened to that realtors fiduciary responsibility then?  Just food for thought... because as you can see, it can be viewed from both sides. Yes, I have been referred to a client as the number 3 loan officer... the realtor telling me that her 2 previous loan officers are very good... give very good rates, and close the deals.  Yay, good for them.  Well, after I got done speaking with that borrower, because of what I know and how I handle clients, I had many negative things to say about these 2 other very good loan officers.  This borrower was not educated on 5 different issues and each time I brought something up, the borrower was like... 'oh really?  I didn't know that"..  so .. please define good?  Great?  And I do refer borrowers to realtors also... it does go both ways.  As a realtor, if the borrower talked more to the loan officer first, is your true fear that you might lose them?  Yes, us loan officers go through this often, because of the control that realtors take and in more than enough cases, that borrower gets the shaft because the realtor thought they knew what was best.  Again, just food for thought. Overall, thanks for your input and feedback.

DANIEL.... . yes, it does seem that some of us are on the same page...  but others have their own thoughts.  Not saying that I am never wrong... but in all honesty, what is the realtor most fearful of if they don't get to talk to that borrower for some time?

PAUL.... comment # 52... . by reading some of these comments and the answers above in my post... not always and in many cases does the realtor prolong that referral... that realtor wants to put their hooks into that borrower first.. and I have had some push their loan officer... and just as my example above, even this loan officer didn't know what he was talking about. Again, who does one trust?  Who is good, that is better than the other good loan officer and or realtor?  thanks

Does the REALTOR have the right to even pre-qualify you as a borrower?

MARK... comment # 53 ... . that is one of the problems... some realtors are really good at directing buyers to loan officers and not all of those loan officers a qualified and or good.  I know it goes both ways and it's just part of the cycle. But where and when does it stop? or in some cases, begin..  just food for thought.

DEREK... . I know some don't feel comfortable ... they think if they talk to a loan officer, that they need to commit. A good loan officer will explain this to them and make them feel that there is no pressure.

BOB... . that sounds like a good plan. But here is a question to you.  What do you consider a pre-approval and what does your lender consider a pre-approval?  I only ask because I would bet that answer is different from the one that I have in mind.  I will write about that in a week.  thanks

NICK.... . thanks for the comment and for seeing eye to eye with me on this one.  But one thing, you stated this... "One caveat, though: I wouldn't necessarily base everything on what mortgage payment you'd be comfortable with, but what total mortgage amount you'd be comfortable with.  Because, as we've seen with some of the ARM and balloon mortgages, the payment can be whatever you want."

I am going to disagree... no matter what, I want to know what payment they are comfortable with.  At that point, a mortgage program is not decided, neither is a term, .. meaning, 30yr fixed or some type of adjustable. That comes after understanding the payment and their goals.  It's virtually impossible to know where to start with a mortgage amount ... how does one know the payment until it's plugged in?  In my opinion, you are just shooting yourself in the foot by even discussing mortgage amount. Sure, I have buyers come to me and say, I am interested in a $300,000 house.. I divert them from that very quickly and for reason.  thanks

CHRIS...comment # 57 ... . I would agree, hence why I wrote this.... thanks.. and it's good hearing a realtor say this...

TAMMIE.... . yes, I can see that many say this. But when in your screening process do you do this?  How quickly?  Just curious.. thanks

J. PHILIP.... . yea, that is a good attitude to have... but in reality, how quickly should they be talking to a loan officer?  I say this because from my experience, I have lost buyers to realtors that pushed them to someone else, and in many cases, they got a bad deal and or bad education or misinformation... I am dealing with an AR member as we speak, that originally went with the realtors recommendation before she came to me...  the loan officer was screwing up the deal and lying to her.  so I think many of us should care.. just my opinion.  thanks and it was good meeting you last month.

ALLISON.... . thanks... I think it was good to read this from other realtors on another site. Hope all is well...

DAVID.... comment # 61 .... . yes, it does make your job easier to deal with a loan officer that you trust. But let me ask you this... do you know them well?  How qualified are they besides giving good rates and closing your deals?  I say this, because I have been up against some so-called good loan officers that AR realtors have lined up and after speaking to the borrower as the last loan officer.. I am disappointed in what I find out. I am not saying that I am the best, that I am God, that I am the only one...  but so many loan officers bypass details after they go over the basics... so is the client getting the best?  Not from what I have seen... thanks

ERICA.... comment # 62 ... . I think many of us agree with this...  but what about those realtors that even try and qualify the buyer themselves?  I am even reading some realtors that say they do this.  I just wrote about this yesterday. Does REALTOR even have the right to pre-qualify you as a buyer?  And yes, call me when you get a chance.  thanks

MATT.... .  first off, thanks for the kind words and I feel the same about you and what you stand for and how you operate as a realtor. In reality of what I said, I stated all of this based on what was mentioned in the answers to that specific question by realtors. How could I state this mildly?  While reading those answers, it was like watching Seagulls hovering around waiting for the next piece of food. I know that we all want the business and go after it.  But many of the answers was for that realtor to take control of the buyer and that scares me at times. Some realtors take it upon themselves to tell the buyer about mortgages and what might be good or bad... and some realtors refer that buyer to a loan officer that might not know what they are doing and or that they don't know what they are talking about. My best example as of now?  The realtor from last week that told my buyers that USDA loans aren't as good as FHA loans and gave her reasons... and then went on to say her loan officer even said that they would be better off with a FHA loan.  That just ticks me off and scares me.

Overall, I know there will never be perfection in this industry, but if I don't write about it and express my opinions, thoughts, and concerns, then how does a borrower even know or have an idea what is out there. As far as my statements in the post above, that the buyer should speak to a loan officer before they speak to a realtor. In all honesty, it doesn't bother me that they speak to a realtor first. Yes, I know that many realtors are found on the internet first because they are searching for homes.. or drive by a sign and want to look at it. My main problem is what the realtor does with that borrower after that fact.  How some realtors steer borrowers with bad answers or misinformation. Again, great example.. if the buyer in my example above would have found this realtor before me, they would have been pushed into a FHA mortgage, and their payment would have been higher. I do understand what you are saying and don't disagree in that manner. But again, please define good, or great, or excellent... when realtors say, I have an excellent loan officer, who will take care of you.  How do we know this?  Assume this?  I will stand behind this statement 110%.. just because the loan officer gave a great rate and gets loans to close, doesn't mean that they are good and or excellent.  So many questions that aren't answered by the loan officer, that could very well lead that buyer to the wrong mortgage that would cost them more in the long run. Just my opinion based on what I see more often than should take place.  Other than that, I agree on most of what you have mentioned.. thanks for your input and feedback.

MATT again .....comment # 64.. .  lol.. well,you clarified what I had kind of mentioned in my last reply to you above.  Yes, we are on the same page and usually are on the same page. And I feel the same way about realtors first speaking to a realtor.  And yes, there are bruised egos, but not even on Trulia... all over..  thanks again.

JANET.... . well, each realtor has their own thoughts and opinions, and what they think is right and or wrong. It's not to say that I am 100% right, but in my message above, this is based on the answers that I read in a question that was given on Trulia.  And sure, looking at houses first is a lot more fun.  thanks and hope all is well.

NEAL... comment # 67.. . What scares me now are even some of the pre-qual or pre-approval letters that have been floating around. As an experienced loan officer, some of them are red flags in my opinion. I have a few realtors that send me their borrower's pre-qual letters just to see if it even looks and sounds right. I am not there trying to persuade the borrower, but to give the realtor a heads up. But overall, you have a good handle on what is needed and in what you look for. Sure, there is a better feeling of the the buyer to look at houses as they get qualified.  It;s just a part of life and human nature.  Numbers are boring.. but a huge and important necessity in this business. thanks

JEN..... .  you stated this... "There are some lenders and agents that are guilty of glossing over all of the monthly costs of owning a home."

This is a huge pet peeve of mine and yes, this is over-looked more than often in my opinion. Even the fact when putting someone into a home and not going over their goals for the near future. I state this because some loan programs might be worse for that borrower, if they would had been asked certain questions.  And as I stated to Matt, overall, he and I are on the same page.  Thanks for the polite compliments.

DONNA.... .  I couldn't agree more with you, that it would be terrible to look at houses and then find out that they can't get that house, or qualify for it.  And I am sure it's even worse when a loan officer says yes, and then they say no 30 days later... thanks

MISSY.... . lol   No, I didn't get a follow up e-mail.  Most realtors just stated what they wanted to... I bet most didn't even read what others had mentioned, especially myself. I did get one realtor that said they agreed with what I wrote.  But no, nobody challenged me or questioned me.  But yes, I am soooo sick and tired of the many responses from realtors that are either violate certain things, that give terrible advice, and even give mortgage advice or state things. I read one from a realtor that said that FHA was going to reduce the seller help from $6,000 to $3,000.  There was no loan amount given.  Damn, that realtor should be shot.. sorry.  And what about those realtors chiming in from 8 states over?  Why are they even answering questions in the New Jersey section, when they are from Texas?  Damn... that ticks me off and scares me.

LISA.... . my pleasure... I have always prided myself in determining what that buyer is comfortable with and not the max they can buy. If this is not explained to the buyer, they will just look at what they can afford max, and over-look the payment. And thanks for that very polite compliment.  thanks

MARK....comment # 73 .. . thanks for the compliment.... but all Lenn did was give a 1 word response with no input and or feedback. If you read many of my responses, this post was more about the answers that were found on Trulia, and not the fact that buyers should not talk to realtors first.  I was trying to make more of a specific point, but there was only a A or B to choose from in this debate.  A. Loan Officer or B. Realtor  thanks

Jeff, to follow up, having spent 25 years in mortgage banking prior to becoming a realtor, for me making the determination as to what is a good pre-approval or what loan officer is qualified is somewhat different than many, but I guess I have faith in fellow agents as well in making that determination. Maybe I'm making too big of an assumption on this, probably a lot of agents who don't do this to this degree, but I am speaking from my personal perspective AND from the positive experiences with most agents that I have had dealings.  As I said, I ALWAYS counsel them where the next step is when they come to me first and provide them with a choice of well-qualified lenders again deferring to my experience with those lenders or the experience of agents that I highly regard and do not pre-qualify buyers in that I am not licensed to do so.

As to the issue of "what kind of approval" there actually is - I have had numerous instances where buyers have tried to use non-local lenders, have brought me letters saying they are pre-approved that clearly state they are pre-quals and my discussion with the lender indicates such. If I am presented with a pre-approval letter from a buyer, I always establish contact with the lender to determine the level of approval and any potential issues that could be roadblocks.

Jeff, another very informative post.  The home buying process begins with linking up with a qualified loan officer - no ifs, ands or buts about it.  The first thing we do when we have a prospect call is ask if they have been preapproved.  If they say yes, we ask by whom?  If they say no, we offer them a few different choices of Mortgage Brokers we have used before.

Actually, the entire process begins and ends with the loan officer.  If you are a Realtor who does not understand this, you will after you have spent days upon days searching for that perfect property only to find your clients cannot qualify.  Oh, and they will be looking at you most likely.

Jeff, what a HOT topic!  As you know I was one of those realtors that responded to that question on Trulia and very shortly thereafter read your post on Activerain.  I sat on it for a while but now I must comment.  As you know I am not one of the 13 realtors that you did not quote and not to reiterate my answer here but I did say:  "Your best bet is to find a buyer's agent and a lender. Those two go hand in hand when buying a home. The lender will qualify you for a mortgage and issue a pre-approval and your agent will need this information so that they can start showing you homes within your price range."   A buyer is nothing without a pre-approval. 

I think the part that you may have indirectly quoted me was about the referrals.  If you reread my answer I did say a realtor referral from your friends or coworkers.  With that being said, I did say that I would gave them the name of my in-house loan officer should they want it.  I have no problem with referring a buyer to my in-house lender.  They don't have to use him but I certainly trust his pre-approval and if he says the deal will close, it'll close.  I work with buyers all the time so it wouldn't make sense for me to send them to someone I didn't know or didn't trust for them to get their mortgage or pre-approval.  What's good for the goose isn't always good for the gander and I believe that but I wouldn't refer my buyer to just any lender.   I certainly have buyers that come with their pre-approval in hand from another source and that's fine.  I don't force anyone to consult in-house but if they ask me, I'll tell them.  I've also closed deals with many other lenders and loan officers that were not in-house. 

Last but not least I had a big named bank tell my buyers who mind you were only approved by this bank for a max of $370,000 FHA that they should look at homes up to $450,000!  $450,000 - I'm not saying there aren't some overpriced homes on the market but buyers approved for $370,000 shouldn't be falling in love with homes in the $450,000 range only to be let down because they can't afford them.