Houses Broker Now Requires Financial Disclosure Upfront

In the past, any houses broker asking for personal financial information upfront before showing a home for sale would be met with a cold stare and would certainly trigger an immediate walk-out by the prospective buyer.

But now, many brokers are asking for financial documents before showing homes for sale, especially higher-priced units. Some argue that they do not want to waste precious time showing properties to people who are only looking or people who mistakenly think they can afford the properties.

Up to now, many prospective buyers are still offended if they are immediately bombarded with questions about their capability to pay even before they can obtain important information about the properties.

In cases where brokers or listing agents ask for detailed financial statements that include pay stubs, tax returns and bank statements before they can be shown the properties for sale, prospective buyers are hesitant and sometimes angry. They think the brokers are being invasive of their privacy and they worry about identity theft.

Michael Signet, executive sales director at Bond New York, explained that brokers now need to know immediately if prospective buyers are really serious about buying. He added that buyers even benefit from the early financial scrutiny because soon they will realize that the properties are beyond their financial capabilities, thereby saving their time and effort.

New York City houses broker Edith Nanazia said that she is now increasingly meeting sellers who require her to email or fax the financial documents of her clients. She added that pre-approval from a bank no longer suffices for many sellers.

Nanazia said that some of her clients have been questioning the need to provide financial documents early in the house buying process, so she has been patiently explaining the trend.

To make things easier for her clients, Nanazia said she uses the financial disclosure form designed by the Real Estate Board of New York. This form includes the buyer’s total income and total assets and liabilities.

Nanazia however believes that sellers should not ask for other financial documents such as copies of past tax returns.

According to Jeffrey Tanenbaum of Barak Realty, it has been difficult making a sale because of the financial disclosure requirement. As a houses broker, he now has to tread carefully when telling a prospective client about financial disclosure at the first meeting in order not to lose the client.

This entry was posted on Thursday, October 15th, 2009 at 12:56 pm and is filed under Home Brokers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.