How to Pre-Qualify Buyers Before You Show Homes

By Jacqueline Smith

Jacqueline Smith started in real estate in 2015 and sold 52 homes her first year in the business as a solo agent. After considering growing her own team, and exploring different team models, she decided to partner with Place in 2017. The partnership allowed her to fast track her growth, and provide better systems and models to her agent partners. Her and her team in Vancouver Washington now close over $165M in annual sales volume, while keeping the quality of the agent and client experience at the forefront.

If you’re working with buyers right now, you know the sting of this one. You show someone homes for weeks and then get ghosted. Or you find out they wrote an offer with another agent. Or worse, that they couldn’t even qualify for the homes you’d been showing them all along.

It happens more than most people want to admit, and even now that buyer agency agreements are legally required, I’m still seeing it and still hearing about it.

So let’s talk about how to pre-qualify your buyers so you’re investing your time where it makes the most sense.

First, let’s name the old way of doing business, because some of us are still operating like this. You get a buyer call or a buyer lead, they want to see a house, and you drop everything, rush out the door, and drive across town without ever taking the time to properly qualify them. I don’t think that serves anyone at the highest level. And this isn’t even about us and our time. It’s about making sure we’re providing a great experience, real education, and real service to our clients.

The framework I use is called LPMAMA. If you’ve been around a while, you’ve heard of it. If you’re new here, it stands for location, price, mortgage, agency, motivation, and appointment. It’s really a framework for your conversation, so you don’t forget to ask the most important questions.

Start with location, price, and a real mortgage conversation. Begin by asking about the location they’re looking in. Are they set on a specific school district or neighborhood, or are they open to wherever they find the right house? Price is the obvious one. What price point do they feel comfortable in, and what payment can they actually afford?

Then comes the mortgage, and this is where I want to slow down. Ask whether they’re already pre-qualified and who their lender is. If they’re not, you want to get them connected with a trusted lender.

And here’s an important distinction: if they’re pre-qualified through one of those online services where you punch in a little information and it spits out a letter, that is not what we’re talking about. You want to know that a loan officer has actually verified a borrower’s income and assets. Dig in a little there and make sure they have a real pre-approval, not just an auto-generated pre-qual.

Use agency and motivation to find out where they really stand. The next question is simply how they’ve been looking at homes so far. You’re trying to get a read on how far along they are, and whether they might already be working with someone. That’s my way of asking without asking, “Do you have an agent?” I just say, “Tell me, how have you been looking so far, mostly online, open houses?” and then I let them talk.

From there, I gauge motivation. I’ll ask something like, “So tell me what has you buying in this market?” You and I both know a lot of people are sitting on the fence right now, so if someone’s ready to get out and look, I want to understand what’s driving that and what their real goals are. Why are they willing to brave the rates and the affordability questions and actually buy?

Always close the appointment, and start it in the office. This is the part a lot of people forget. You could go straight out and show a house, but I like to start with a consultation in the office, so I can properly walk through the agency agreement, commissions, and what the buying process actually looks like in this market. If you just get an agreement signed on the hood of a car, or send it over by DocuSign and tell them you need it back before you’ll show the house, you’re cutting corners that come back to bite you later.

When buyers understand the value of sitting down with us first, we get more commitment and much better transactions that actually make it to the closing table, which is what everyone wants.

That’s LPMAMA. It’s the framework that makes sure we have the information I need to set myself and my clients up for success the whole way through.

If there’s ever anything I can do to support you in your business, reach out anytime. I’m always happy to talk real estate with you. Call or text me at 360-800-1334, email me at Jacquelinesmith@place.com, or visit jacquelinesmithleadership.com.