When deciding to sell your house, either you or your agent will want to quickly weed out potential buyers who cannot really afford to purchase your home. Make sure that no one is randomly scheduling appointments for buyers that have not be pre-qualified for a mortgage or provided proof of funding. This is such a waste of time for everyone if the buyers have not begun the approval process to obtain a mortgage and are assured that they can afford the house they are considering.

A number of factors will help determine whether or not you are wasting your time negotiating a sale with someone who cannot purchase your home.

• The buyer's debt
• The buyer's credit history
• The buyer's current income and employment
• The buyer's cash position and availability of a down payment
• The length of time the buyer needs before closing on your home
• How interested the buyer is in your home verses others that they are considering
• If the buyer currently owns a home and if that home needs to be sold to purchas another home
  

Qualifying for a mortgage is not the same for each borrower. A borrowers credit score will have a lot to do with what mortgage plans are available to them. Each mortgage plan offered requires certain qualifying ratios. A typical ratio would be a 28/36. The borrower would be allowed to spend 28% of their gross monthly income for a mortgage expenses (principal, interest, taxes and insurance). The entire amount of monthly payments on all
debt carried by a buyer (car payments, credit cards, etc.) can not exceed 36% of their gross monthly income. The rate that a buyer will receive will be effected by the way they manage their credit, and will therefore have an impact on how much home they can buy or how much mortgage they can afford.

The lender chosen by the buyer will calculate both ratios and will only allow the lowest payment. As you can
see, without the buyer's credit history, a seller would have no way of calculating this. I find it is always best to refer buyers to a professional mortgage broker that I know and trust for qualification. This assures that the lender has considered the buyer's credit score while being qualified. Qualifying a buyer should take most mortgage agents less than an hour. They can pull a credit report in a matter of minutes and find out everything that they need to know to begin the mortgage application process. I am sure that with pets, children, busy work schedules, etc. you don't want to take the time to show your home to someone who can neither afford to buy or pay for your home. The amount of effort to keep your home perfect for showings and to leave so the buyers feel comfortable is far too high for someone who can't buy it.

People who know they cannot buy sometimes think that for sale by owner homes offer a better opportunity, because they're hoping to find a seller who will finance the transaction or offer a lease purchase option. If you are in this position you may consider asking these questions to get a better feel for someone's buying power:

• Have you been pre-approved for a mortgage amount in this price range? (Then require that proof of pre-approval be presented prior to showing them your home.)
• Can you buy a house now, or do you have to sell your current home first? (Then decide if you are willing to tie up your house until they sell.)

I want to stress, NEVER show your home to someone who has not been Pre-Qualified. If a buyer will not go through this simple procedure to get this done, they will never buy your home!