agent wants to see preapproval before offer is accepted

We made an offer on a house and the agent now wants to see the preapproval from the bank. They haven't accepted the offer yet.

Is this normal and should I give it to him?

the problem is that the preapproval is for a much higher amount (more than 100k over) so I don't want him to think we're rich and use it as a bargaining chip.

On the other hand, a higher amount might indicate we'll have no problem with finance.

what should i do?

 

Remember agent is working for seller. They want a transaction to occur. They also want to ensure the transaction does actually occur.

What I've done with my own purchases is pass on my mortgage brokers number, they can be called and confirm you're able to buy and not disclose the amounts.

 

so you do think the amounts is going to be bad for me on the negotiating table?

 

i guess it's a fine line. I want to definitely re-assure him i can get financing. That's important because in a way, the agent doesn't work for the seller. He works for himself. A few grand in the price isn't going to change much for his commission. He's more interested in the transaction itself.

 

The preapproval is usually a higher amount because it states you can borrow up to that price not that you will use that amount for every property

 

It's not normal to ask for a pre-approval but I gather he knows you have one as you told him?
If so then it might simply be best to show it to him so he can assure the sellers that you have finance under control. If you like you can redact/cover up any personal information in the letter including the amount. It opens up another can of worms that you might be trying to hide something.
A pre approval letter even a conditional or unconditional finance letter is yours and you do not have to show it to anyone besides your bank and broker. A REA has no rights to view it (in my state) and approvals are communicated by conveyancer/lawyer to REA.

 

Tell them nothing !
Make the offer and have your deposit/cheque book handy
That's all

 

I've written so many letters for clients confirming that we have a pre-approval in place that I've got a template. The letter itself is non-specific, it simply confirms that we have a pre-approval in place for an amount that it sufficient to purchase the proposed property.

I certainly agree that they don't need to know the specifics of a pre-approval, you shouldn't show them the letter from the bank. This only gives the agent scope to increase the price.

@RogerP simply ask your broker or banker for a similar letter.

 

the agent just rang and he verbally said the owner will accept the offer.

So i've forwarded it to him.

It would be a bad look for him to negotiate now.

 

I have a template I use for this when we don’t want to submit an application until a contract has been signed.

It basically says the buyer has demonstrated capacity to purchase a property for $offer price and they have sufficient funds to complete the purchase as at ‘y’ date. Subject to valuation and lender approval.

 

Agreed - many agents in SA want to see pre-approval letters, I normally suggest only showing name and confirmed pre-approved, not the amount. Just asking for agent to play games with you.

 

I once had a pushy NSW REA tell me he wouldnt show me a property unless we could complete a finance assessment. He got told. I wasnt going to divulge a thing for him to act like a door ***** and decline viewing unless in his view we could afford to buy. Wife was also highly offended.

He did back down and we could see a problem coming so declined to view any properties they had (none had a price) and made sure his competing agencies all knew why. We ended up buying a few weeks after and walked past and made a point of telling the principal we had bought and why his tactics were offensive.

They have since closed. The agency we used is still open.

 

I know this is finished now, but it could have been an opportunity to list your pre-approval up to your offer price and no higher. Would certainly have been hard for them to negotiate from there. Risky strategy, but like any negotiation you need to be willing to walk away for the best price.

 

Offer them well above the asking price and im sure their requirement to see pre approval will magically disappear into the abyss