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Qualify a Buyer

First some good news. When you qualify a buyer as a for sale by owner, you don't have to do it very often.

The reason is that the potential buyer(s) have to meet certain criteria.

The only people that you have to concern yourself with, when it comes to a buyer you want to qualify, is the following:

  • They either are about to write an offer to purchase on your property, or have already written an offer. Side Note: Make sure you have some for sale by owner contracts on hand!

  • There is no 2nd reason!

If someone shows no interest or shows lots of interest, or it doesn't make any difference. If they aren't going to put an offer in on your property, you don't have to go through the qualify a buyer steps.

  • They either are about to write an offer to purchase on your property, or have already written an offer.

  • There is no 2nd reason!

If someone shows no interest or shows lots of interest, or it doesn't make any difference. If they aren't going to put an offer in on your property, you don't have to go through the qualify a buyer steps.

Need more information about mortgages? Just select the photo link of your choice below.

You are Probably NOT a Mortgage Lender

If your career does not involve writing up mortgages for people, your qualifying questions to qualify a buyer are going to be a lot different.

If you are blunt and start asking personal questions to a buyer so you can qualify him or her, you may just turn them off and things could actually get ugly.

Questions not to ask when you qualify a potential purchaser.

  • How much do you make a year?

  • How much do you have in credit card debt?

  • How much do you owe on your car?

  • Have you ever been bankrupt?

Yes, if answered truthfully, those are important things to know. As a for sale by owner, though, questions of this nature are too rough, gruff and can be downright intimidating.

The buyer might not disclose the information you needed anyway.

qualify a buyer

A Kinder, Gentler Approach

To qualify a buyer, lets' try a softer approach, OK?

You don't just fire these questions at the buyer in rapid fire. Ask a question, wait for the answer.

Next you either make a comment about the answer or volunteer some information about yourself.

Here are some questions you may want to ask when you qualify a buyer that can reveal a lot of information, but not scare the potential buyer.

  • Where are you working now?

  • What do you do there?

  • How long have you been there?

These questions can reveal a lot of information.

Let's break some of the information down.

You: Where are you working now John?

John: At MNLOP Aircraft Parts and Service.

You: Boy, that's a big company. I'd get lost if I ever got past the front entrance.

You: What do you do there, John?

John: I'm the manager of overseas accounts.

You: With the amount of business MNLOP Aircraft Parts and Service does throughout the world, I imagine it keeps you pretty busy.

John: Oh yeah. I have to do a fair bit of overtime to keep everything on track. I really enjoy it, though.

You: Yep, as long as you like what you are doing, a bit of overtime can be almost enjoyable.

You: So, how long have you been with MNLOP Aircraft Parts and Service now?

John: Let's see, it will be 18 years this June.

You: Wow! I don't know if I could ever stay at the same job for 10 years, let alone 18!

If you receive answers like the ones above when you qualify a buyer, you can probably stop the questions. Asking further questions, in this case, will probably not accomplish much.

Keep in mind that even though everything sounds good, that doesn't mean it's solid.

John could have a pile of debt, have a gambling addiction or have huge alimony and child support payments to make.

The answers above, revealed some very important information, to help you qualify this buyer. They are:

  • The buyer has steady work at a solid company.

  • The buyer has an upper management job that probably pays well.

  • The buyer has a long history of stability.

Answers that Ring Warning Bells

Don't be too quick to draw conclusions when you qualify a buyer, if you don't like the answers. There may be other factors involved such as;

  • The buyer's rich uncle just died and left a bundle to the buyer.

  • The buyer's parents are buying their kid a house.

A Visitor's Comment

First of all, I want to thank you for your great website. I've bookmarked it and have started to read it all in detail. I really appreciate your effort to help people sell their own houses and eliminate the expensive realtor commissions.

  • The buyer just beat the odds and won the lottery.

Anyway, you get the picture.

Here are some answers that may mean trouble when you qualify a buyer.

Q. Where are you working now Tim?

A. At MNLOP Aircraft Parts and Service.

Q. What do you do there?

A. I bring John the overseas manager coffee and run errands for him.

Q. Oh, and how long have you been there?

A. I just started last week. I was out of work for 3 months until I found this job.

These answers tell you that the buyer is in a lower paying job and has very shaky work stability. Not the kind of history that mortgage lenders are excited about.

People that may have a hard time obtaining a mortgage may or may not include the following:

  • Just changed careers and have been employed in their new career for less than a year.

  • Have a history of unemployment.

  • Commission sales people. (This depends on how long and their history of income).

  • People who have their own business but have 3 years or less in that business.

  • Buyers that have a bankruptcy on file.

  • Folks with lousy credit.

Questions You Don't Need to Ask

You can also go to far when you qualify a buyer in your questioning without it being necessary. Some examples would be as follows:

  • How much down payment are you investing? You will find that out when you receive the offer.

  • When did you want to take possession? You will find out when you receive the offer.

  • How much do you owe on your car? Too blunt and personal. Let the lender ask those tough questions to qualify the purchaser.

  • How much do you owe on credit cards? Again, to personal and blunt.

An Extra Questions to Ask When the Time is Right

Here is a question when you qualify a buyer that is time sensitive. Wait until you reach a certain point in the selling process then fire away.

  • Have you received a pre-approval for your mortgage yet? Ask this question when you are close to signing an offer to purchase form.

- Whether the answer is yes or no, make sure that the mortgage clause time is short. My suggestion is no more than 5 business days.

The buyer may tell you they have a pre-approval when in fact they don't.

This may be because they are just stringing you along, or because they aren't quite sure what a pre-approval is and what it means.

Whether the buyer says they are pre-approved or not ask this next question.

  • What mortgage lender will you be using?

- The buyer should have a quick answer to this question. Watch their body language to see if they hesitate or shift their look away from yours.

Help the Buyer and Yourself when You Qualify

If you read my section about Mortgage Brokers, you know I'm a big fan. Sending the buyer to a mortgage broker, might just save the contract if the buyer isn't gold.

Here is one way to approach the buyer.

You: Mary and John, would you mind if I shared something with you, that might save you some money and time?

Buyer: Sure, go ahead.

You: Would you use (name their mortgage lender) even if the interest rate was higher and your monthly payment were higher than another lender?

Buyer: What do you mean?

You: Well Mary and John, if you aren't familiar with mortgage brokers, in the vast majority of the time, they can shop you lower interest rates and fit in mortgage packages to suit you and your lifestyle, that perhaps your present mortgage lender can't offer. Would that be of help to you?

Buyer: Well, we aren't opposed to saving money.

You: Here is the name and number of ........ They won't cost you a cent and you could save thousands of dollars.

When you qualify a buyer, why would you want to bother with this step?

I'm glad you ask. If the buyer is at all shaky on the financing, a good independent mortgage broker, is much more likely to put the mortgage together. This means you win and the buyer wins.

Here is something you may or not know:

Sometimes a particular mortgage lender may be in a time period where they are lending fewer mortgages out, except for "golden" mortgages.

If your buyer is not one of the "golden" clients, they may get turned down and nullify your contract.

The mortgage broker, however, not only shops for lower rates but also tries to fit the buyer, with the mortgage company.

Win! Win! Win! Everyone is now happy.

Just a Reminder 

You should always have purchase contracts on hand when selling for sale by owner. When I was a Realtor, I never left home without them. :)

I have done the research for you, to obtain these forms from several different countries. The forms are:

  • Kept up to date.

  • Written by lawyers.

  • State and Country specific.

  • Companies have an A+ rating with the BBB.

  • Can be downloaded quickly online, or you can obtain hard copies by mail.

Just go on over to, Contracts

Qualify a Buyer - In a Nutshell

Just for a quick review, let's take a quick look at the highlights when you qualify a buyer.

  • Only ask financial questions, if you have received an offer, or an offer is going to be written.

  • Don't get too personal, by asking about the buyers credit history, or debts.

  • Do ask, (in a friendly matter-of-fact way), questions concerning employment and employment history.

  • Do ask, if the buyer has been pre-approved.

  • Do bring up the use of a mortgage broker. (Optional)

You see, when you want to qualify a buyer, you don't need to get all "in their face". Just be natural, find out some basics and let the professionals handle the rest.

Mortgage Payment Sheets

One thing you might want to supply potential buyers is some example payment sheets using various down payments, interest rates and amortization periods.

This is especially helpful when you qualify a buyer that is, buying their first home.

You could either ask your favorite mortgage lender, or mortgage broker for some or make your own.

You could use one of the many free mortgage calculators you can find online. Just do a search for mortgage calculators and choose one that you like that calculates the payments in the country where you are selling the property.

ONE MORE TIME: Keep the time for finding a mortgage short. Except under rare conditions when selling a residential property, 5 business days is the maximum.

If you want information about time frames to allow for various contract clauses, go to Don't be Handcuffed by Time Frames!

If you see 30 days to find suitable financing, I'd suggest you don't accept.

Either change the time frame or refuse the offer.

On the note of the financing clause, "Finding suitable financing on or before such and such a date" is another warning signal.

The financing clause should state clearly, the amount of money to be mortgaged. This will give you a sense of how solid the offer is, concerning financing.

For more information go to How to Write Real Estate Clauses. or Real Estate Contracts.

What do I suggest you do in this case? Have the clause changed to specific times and amount(s).

An offer with 50% down payment is much more secure than someone that can barely squeak out 5% down payment.

For More Information about Mortgages

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