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May 15, 2009
Giving financial info to broker
I am planning to put an offer on a house in Brooklyn. I've got a mortgage pre-approval letter from my bank, and I've given that to my realtor. As part of the offer process, the realtor has asked me to fill out a form detailing my financial situation. I'm hesitant to do this because I suspect it would hurt me in negotiations if the seller (or seller's broker) knows how much money I have in the bank and so forth. My broker argues that I should submit this information in order for my offer to be taken seriously and to reassure the seller that the deal won't fall through due to financing. How do other people feel about this? Does divulging my financial information truly strengthen my offer or should I keep my cards close to the vest?
Comments
In my three purchases of NYC real estate I have never had to provide that kind of information as part of submitting an offer, and I wouldn't agree to do so. Your financial info is private and should only be disclosed with appropriate safeguards.
Posted by: geekspice at May 15, 2009 11:49 AM
geek...he's not divulging his SS# and account numbers. The seller is probably conmcerned that the buyer won't get financing (pre-approval letter or not) and wants some reassurance. However, the seller should also know that a prospective buyer can put any old numbers down on a sheet of paper.
Posted by: daveinbedstuy at May 15, 2009 12:09 PM
This is typical if you are buying a coop, not a house. The pre-approval letter should be enough. Does this broker typically sell coops? Are you putting down less than 20 percent?
Posted by: mopar at May 15, 2009 12:12 PM
Hi Che
Not sure who you are dealing with or where in Brooklyn. But,
my broker who has my house listing does request that info from any potential buyer. I am not sure if it's required but as a seller it's helpful to weed out who really can seal the deal vs someone who thinks they can.
For example
I would much rather sell my house to someone offering 1.1 million who is able to put 300K down and makes $250K a year rather than someone offering me 1.2million with only 150K down who makes $100K a year
I would rather take the 100K hit on the agreed upon price if I know the banks will deem the person viable.
Posted by: gemini10 at May 15, 2009 12:15 PM
Sorry, but I think a current pre-approval should be enough for the seller. dibs makes a good point though. There's obviously not going to be any verification of any of the numbers the buyer puts down. Sounds like a basically worthless exercise to allow the seller/broker to feel better.
Posted by: geekspice at May 15, 2009 12:58 PM
Many thanks, folks. This is really helpful, especially to hear about it from a seller's perspective. We're not buying a coop and we're planning to put down at least 20%. But I can see how in some cases it might behoove us to go ahead and lay out our finances for the seller. We're planning to offer a good bit below asking. If they are thinking like Gemini, maybe they'll be more willing to accept this when they see that we're quite sound, financially.
Posted by: chebubble at May 15, 2009 1:47 PM
Back in the boom days when we were selling, the buyers' finances really did make a difference in evaluating offers. We used the financial info to assess their ability to close the deal; we definitely did NOT think, oooh, he has lots of cash in the bank, we can push him up higher on his offer.
In this credit-shy market, I think it strengthens your case if you have a pre-approval AND are willing to part with some financial info to givea skittish seller peace of mind.
Posted by: zeebee_in_bklyn at May 15, 2009 3:26 PM
There is no way I would turn over my financial information to a seller and/or seller's broker. This seems like a broker who is still living in the la-la-land days of multiple offers at or above ask and brokers being able to ask buyers to do cartwheels for the privilege of forking over millions of dollars for an overpriced house. The seller should feel lucky that you are making an offer on his or her house. Don't let the seller or the broker control the situation. Those days are gone. A pre-approval is enough. A bank statement shows only what is currently in your accounts; it can be gone tomorrow. It really shouldn't add that much if you have a pre-approval.
Posted by: Nobrokersplease at May 15, 2009 4:53 PM
give some basic info and provide some properly censored documentation if you're in a strong financial position.
Posted by: slick at May 15, 2009 5:11 PM
Sorry Gemini but what if buyer #2's bank is willing to give him/her a mortgage as well, are you saying you're going to take a 100k hit? As long as you're fairly confident your house will appraise at least for the amount that's being financed, I would say it's worth considering. For Coops yes. I would agree with Mopal, It's non of the seller's or his/her broker's business to get every detail of your net worth BEFORE YOU EVEN PUT IN AN OFFER. I can understand before contracts go out. The fact that you have a valid pre-approval (better yet, pre-qualification) letter should be enough for an offer. Saying that, if it's a house you like then don't let pride or principle get in your way. However, your point about your net worth being a disadvantage may be valid.
Posted by: Crownlfc at May 16, 2009 2:18 PM
chebubble, if you do not want to show all assets, maybe you can mention just some account balances selectively. For example if you have two accounts with 200K each, you probably can mention just one of these two. It will show that you capable to put 20% down. I do not think, it will be viewed as misrepresentation or then everybody who did not mention 401K or 586 will be viewed as misrepresenting.
Of course I assume you have several accounts. Madoff and others give a good example how keeping all eggs in one basket is not a good idea.
Posted by: bobjohn at May 17, 2009 8:53 AM
Ignore it. I've never given that info out, and wouldn't. What are they going to do? Sell the house to the next highest bidder?
Posted by: raphael9 at May 18, 2009 5:19 PM
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