How to reply realtor's question(s) related to loans?

Question

I'm new to real estate investing. When I reached out to realtors, they always ask me to check how much loan I can get, is it expected? I am a little bit concerned that if realtors know I could finance at certain number, wouldn't they be less likely to bring me the deals that is much less than that number?

Another question is that, I contacted several realtors, and some asked me to reach out to their team members who help clients figure out loan limit. Should I go to a bank to figure out the loan limit myself or work with realtor's team members? (I have not signed any contract with these realtors yet, but it seems like working with their team members for loan limit is a prerequisite).

Russell Brazil · Answer

There is no reason a realtor would believe you could afford a home that costs one single dollar unless a lender tells them you can afford the $1 house.

Account Closed · Answer

@Elaine Lee you are under no obligation to use the lender that your Realtor suggests.  I would steer clear of any agent that makes this a prerequisite of doing business with them (they are getting referral fees).  Find yourself a mortgage broker that is local to the market that you are purchasing in and who has experience dealing with investors.

Your Realtor is meant to be a partner in your investing business. Find one that you feel comfortable workign with so that you don't have concerns about being manipulated into higher priced properties. Realtors are well within their rights to screen prospective clients so that they aren't wasting their time, though, so you should make sure your are being honest about your ability to secure financing.

Dwayne Poster · Answer

Not only does the Realtor require that information to provide effective service, you need to know it as a reality check. It is also a good idea to talk to several lenders, includes their referral, to understand who has what constraints, and how you could work towards improving your position. There is only one way to know if you are being priced, and that is to be knowledgeable about local market values.

Julie Toh · Answer

@Elaine Lee

A realtor is one of the key partners on your team.  Build a relationship with key partners, kill them with kindness and you'll be rewarded. Be clear and transparent about your expectations and your affordability - the realtor would appreciate this.

I learned from experience to build a team of trusted RE professionals that I'd want to work with for the long-term. After connecting with my realtors through my inner circle, I have a complete team of go-to RE professionals that provide invaluable knowledge.

Mason Hickman · Answer

@Elaine Lee Agents don't want to work with people who aren't pre-approved because there are a lot of dreamers or people that think they can afford more than they really can. When you're setting up searches, let your agent know what you are searching for. If they won't show you what you want, find a new agent that you want to work with and will search using your parameters.

Go with who you're comfortable with for getting a loan. Oftentimes, Realtors have preferred mortgage brokers because the Realtor knows that the mortgage broker/lender will get the job done and keep things on track.

Anthony Dooley · Answer

A Realtor should always pre-qualify a prospective client before they spend a lot of time looking at homes just to find out that they are not qualified to purchase a property. Don't take it personally. You should talk to a lender and get a pre-qualification letter prior to engaging a professional Realtor to help find a property. However, as an investor, your best deals will be found off market directly from the seller without the help of an agent. An agent will usually only show you listed properties, which you can easily find online yourself.

Theresa Harris · Answer

It is normal.  They want to make sure you are pre-approved before they show you houses.  If you can borrow $500K and only want to spend $400k, tell them you are approved for $400K.

How to reply realtor's question(s) related to loans?

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