In the current environment, a lot of us start to do cartwheels when an offer comes in on one of our listings. Wooooo! Hoooo!
Let’s do it!
Yet, we are duty bound to protect the interests of our clients, The Sellers, and we do want to make sure the deal gets all the way to the finish line. So, we ask for some proof of the financial ability of The Buyers to complete the purchase. Pretty reasonable, don’t you think? But, how much information is too much information and what about the confidentiality that the buyer’s agent is duty bound to protect?
Is There Such A Thing As TMI?
We all know that most lender letters are pretty much worthless. Sure. There are good, reputable and honest lenders who have done a lot of the work necessary to really qualify a buyer for a mortgage. The two of you can go to the next post.
However, I’m not sure the listing agent has either the right or the need to request detailed financial statements showing occupation, income, assets and liabilities. So, I’m wondering how listing agents determine whether Buyer A is a safe bet. Yeah. I know, in the good ol’ days these detailed Financial Information sheets were de rigeur because people didn’t go to a mortgage professional prior to writing an offer. It was truly up to the listing agent to determine if the buyer had a shot at covering the nut.
Things have changed.
Most listing agents I encounter don’t consider a written offer an “offer” if it doesn’t have the requisite “pre-approval” letter (in quotes). Ditto the photocopy of a check written for an earnest money deposit. Forget that the lender letter may have been a fill-in-the-blank form or that the photocopy of a check is an optical illusion. It’s now part of the routine. Yet, some will still stomp their feet and require this detailed financial disclosure form. Is that crossing the line?
Do I really want to let the Seller know my clients have a million dollars in their retirement IRA if they have no plans to use it for the purchase? Does it matter that the buyer has just been on the job 3 months as the store manager at Best Buy or 3 months on the job as Under Secretary of State for International Development?
I realize the examples are pretty extreme but my point is that some information may be irrelevant to determining whether or not a buyer has the financial ability to make the purchase and the buyer has a reasonable expectation that their financial life will not be laid bare just to satisfy the whim of a listing agent or Seller.
So. Is there such a thing as too much information?
