An explanation of a request for the buyer’s ability to purchase a home through showing proof of funds or a lender letter:
The answer is "no", you do NOT have to provide proof of funds or a pre-qualification letter to your Realtor. But......Realtors also do NOT have to put you in their car, spend hours taking you to see homes, or help you in any way. Realtors are not a governmental entity, required to perform a task for consumers. The relationship between buyer and agent should be mutually beneficial, built on trust, with both parties willing to demonstrate to each other, their commitment to the process of finding a home. A Realtor's background can be examined. Consumers have ample opportunity to research and diligently seek out an agent they can trust. So, it is not out of line in any way to ask that the buyer demonstrate the fundamental ability to actually perform. In easy speak....we want to know that you can actually buy, and aren't just using our services, time, and money to get a free city tour, or settle your housing curiosities. We have NO problem spending hours and hours doing exactly that, but, we like to know that we aren't having our leg pulled. Imagine working at your job, and at the end of the week when no paycheck shows up, your boss says: "sorry, I don't have any money to pay my employees". Wouldn't you like to have known that BEFORE working for that individual. And remember, agents have husbands, wives, children, etc. Asking them to devote time to you, surely shouldn't be soured by simply needing to provide proof that you can actually buy.
Another reason is that seller's deserve to know that strangers coming into their house, have at least exposed to their agent who they are, and that they can actually purchase the homes they are looking at. Imagine selling your home. How would you feel if you found out someone was just in your house, got to see all of your personal belongings, learned whether you had a security system or not, just to find out they have a history of never paying debts, no money in the bank, and zero chance of actually buying your home? It would sicken most people. So, our job is to also help protect our consumers.
A 3rd reason is that if/when you are going to make an offer, you will have to provide the proof of funds or pre-qualification letter to even be considered. So if a buyer is calling on an agent to see homes, isn't it reasonable that this information be provided up front? If you are wanting to look at homes, then it should be because you are ready to buy. Correct? Anything less would be just using an agent to show homes for curiosity, which means you would be asking someone to spend time and money, with no chance of compensation. If you want to look at homes, it should be because you are ready to make an offer. To make offers, that information will be required. Not wanting to provide such info basically lets the agent know you are not actually serious.
Trust....I had a prospect who said: "My information is personal, and we don't know each other." Sure. But that goes both ways. They were fine with getting into my car though, a stranger, and to spend a day with me though. So why should the trust be a one-way street? The husband made the mistake of actually blurting out: "We don't want to mess with that....we just want to look at houses". So think about that....asking for their proof of funds allowed me to expose the fact that they actually intended to use me as a free tour guide of my town, with no intention of making any offers. That is rude really. There is no reason to disrespect others that way.
Summary.....if one is serious about utilizing an agent to go see homes, it should be because they are intending to buy, should they find the right deal. To even make an offer, financials will be required. Not wanting to perform this standard task, tells the agent you are not serious. Because we do this for a living, and support OUR families with our services, there is nothing wrong with needing that proof up front.
If my response sounds condescending, or too blunt, my apologies. Again, I believe consumers deserve the respect of a direct, honest, uninhibited answer.