Showing homes to people who cannot afford them creates a very awkward situation. You simply must financially qualify your buyers before you ever cruise the neighborhoods to view property or risk wasting tremendous blocks of time, money, and resources as well as compromising your professional standards.

The best way to breach this subject is to be simple and direct. You might preface our questioning with a statement such as, "Okay, folks, in order to find the best property, fast, and at the best possible price... it is essential for you to know as accurately as possible what you can qualify for."

Notice the emphasis is on "for you to know" versus what "I need to know." This places the proper emphasis of being a benefit for them - where it rightfully should be.

Next, talk about the down payment. "Of all your available assets, the money you have saved (or anticipate obtaining upon close of your current sale or whatever), how much are you comfortable putting towards a down payment?"

The subtle beauty of asking the question this way is you are not asking them to reveal their entire, personal financial status (if you feel you can get it - get it), but are instead just determining what they have planned to provide as a down.

Once you've obtained a figure, cinch it tighter by asking, "If we found a home you absolutely had to have, and we will!, and it was absolutely necessary to cinch the sale, would you be willing to put more cash into the home than (offer previously stated amount)?" Your goal with this question is to determine whether their stated down payment is the highest amount available. Nothing more, nothing less.

Income questions should then be asked in a relatively point- blank manner. Watch body language as well as listening to their responses. A hand covering their mouth as they mumble a high round figure is a good indication the buyers are being less than forthright.

You must obtain this financial information or you are wasting your time and theirs. Get straight answers. Insist on straight answers in a firm but friendly manner. Perhaps the easiest, most professional way to obtain this information is to have a lender's qualification form available for them to complete.

If not, then be sure to discover all the monthly payments to which the buyers are obligated, i.e., car payments, credit cards, student loans, etc. Next, ask point blank about their credit standing: charge offs, bankruptcies, judgments, liens, and late pays. If they hedge in offering this information, be firm, explaining it will all come out in the wash anyway so they might as well be up-front with it so you can do your job to the best of your professional ability.

Taking all of the financials into account, you then calculate for the approximate price of the home they can afford and should look at. Ask for agreement here. If the buyers are comfortable with the numbers...proceed.

Published: July 26, 2001

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Robert Fore is the president and CEO for Realty Profit Systems. He is a nationally recognized marketing trainer and strategist who specializes in combining the proven principles of direct response marketing with the cost-effective, worldwide penetration of the internet. Realty Profit Systems publishes the Online Real Estate Marketing Report at http://www.hometeam2000.com and offers a free, weekly e-zine of real estate marketing tips at http://www.top10realty.com.