I had an experience over the past week that caused me to shake my head a little, like a Rob Ford bobblehead. Actually, this experience has been repeated too many times to count over the past year. Personally, I could frame it as “how to kill a home sale before you get to the starting line.”

Here is a breakdown of how the sale process started and what caused it to stall.

When I place a home for sale, there is a section on MLS that the public cannot see in an area called “Broker Comments.” This is where you can ask for things from agents who may be submitting an offer, like how long you need to be able to get together with the Sellers etc. In all of my listings I state, “When submitting an offer, if there is a finance condition, please provide a pre-approval.” One property I recently sold ended up having 8 offers submitted on it and only one offered a pre-approval. If you are wondering why I am so determined to obtain a pre-approval the answer is pretty simple. My hesitation is with taking the property off the market for a week conditionally with a Buyer who has not started the process of becoming approved with a lender. This happens more often than you may imagine. The responses were varied as to why the Buyer representative did not have a pre-approval.

• The Buyer had applied, and the lender has not responded.
• They Buyer had a pre-approval and it had expired.
• The Buyer had not applied yet.
• The agent took the Buyers word that they had been pre-approved.

I think the response that was the hardest to understand was that the Agent who stated that he never gives pre-approvals because they contained confidential information he was not comfortable sharing. What surprises me is that a professional can submit an offer to purchase a home, asking for a week to arrange financing and not give some indication that the Buyer knows that they can afford the property.

A quick scan for the areas from Clarington – Whitby over the past 7 days shows us that out of 172 total sales, 49 were sold conditional. Most times the conditions will be on financing and home inspection and when a Buyer submits an offer that is conditional upon financing, showing a letter from their lender tips the odds in their favour. Especially when they are in a competing situation. The home I mentioned above with 8 offers, only one submitted a pre-approval letter and that was the one that was accepted.

In this market, where homes are selling within a week and in Clarington where over 82% of the homes are sold for more than asking (indicating a bidding contest) here are a few tips that may help a Buyer secure the home they are offering on.

• Include a pre-approval letter from the lender you are using.
• Make sure a strong deposit is included with the offer and obtain a bank draft to show to the listing agent when submitting the offer.
• Make your offer the most acceptable to the Seller. If the Seller is asking for a 60-day closing, do your best to match this. Also, if they have asked for personal items to be excluded, respect their requests.
• Ensure your offer is clean and free from clutter. In the past few weeks, I have reviewed offers that have included clauses that cover basement apartments, (where the home did not have one) garage door openers and central vac, (the home did not have a garage or central vac) and one that asked for the water softener to be left. In this case the Seller did not know what a water softener was.
• Also, allow enough time for the agent and Sellers to review the offer. I have received offers this year where the response time was under 3 hours.

Today’s blog was inspired by an agent refusing to offer a pre-approval due to “confidential” details of the Buyer. During my discussion with the agent, I asked what would happen if a tenant tried to rent an apartment and refused to give their financial background or applying for a credit card and not allowing the lender to see your credit. It just makes sense to offer anything within reason to help your offer become accepted in this competitive market. Years ago, I brokered mortgages along with selling Real Estate and arranged a mortgage for the son of one of Canadas most celebrated female singers, (think Snowbird) and when I asked her to complete a mortgage application, she had no issues completing the form. Somewhere in my files I am sure I have her entire financial background, however all I needed it for was to submit it to the lender. My interest was in getting a mortgage for her son, not in snooping into her financial background. A professional in our industry does just that – they work with sensitive information when the need arises, and the info goes no further than a desk drawer.

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