In addition to only allowing buyers who are under a brokerage contract to view listed sellers' homes, the traditional real estate industry needs to get more serious about working with qualified buyers only.
Just as not having buyers under contract puts agents at risk of losing precious man-hours and resources, allowing buyers to view homes and write offers to purchase without being prequalified by a lender is equally foolhardy. Not only does such a practice waste agents' time, it puts sellers' security at risk.
Buyers are already empowered with a sense that they have access to a vast inventory, and in some ways, more than they need to be. They can already view most homes on the Internet, and many with bedroom and backyard views, thanks to photo and virtual tour publishing technologies. In order to entice buyers, the seller has already given up a great deal of privacy. Should the industry take away the sellers' security, too?
Security for a seller is more than physical safety. It is also financial. If an unqualified buyer makes an offer on the seller's home, the home is effectively removed from the market for a crucial marketing period. If the transaction falls out of escrow because of the buyer's inability to qualify for a loan, that puts the seller's equity at risk. The seller may have lost any marketing advantage, and may be in the position of having to take less for the home from a second buyer. This would be particularly true for the relocating seller or the seller who is moving because s/he has found another home.
Homes go "back on the market" with alarming regularity, due to the real estate industry's laziness and/or cowardice in getting control of buyers. Listing and selling agents are equally to blame when unqualified buyers view a home or when a home falls out of escrow. By skipping the vital step of prequalification, the agent may believe that s/he is helping to win the loyalty of the buyer, when they are actually putting homeowners at risk. And if the home falls out of escrow, was the risk really worth it?
While the buyer's agent may be concerned about the buyer, imagine the discomfiture of the seller who has no idea who has viewed his/her home, much less why both sides were represented by real estate professionals in the transaction, and yet the deal fell through for a reason that was utterly preventable. Has the seller's agent really served the seller's best interests by allowing the buyer's agent to bring an unqualified buyer to the negotiating table? Hardly. Neither has the seller's agent served the professional image of the industry.
And what toll does this practice take on industry practitioners? It is the unempowered buyer's agent or the traditional listing agent or broker who wants both commission sides of the transaction who are most like likely to work with unqualified buyers. Both are banking on procuring cause to secure their commissions, and at the expense of both the buyer and seller. Neither wins if they are spinning their wheels for a buyer who is neither ready nor able to buy a home.
And what of the buyer? At best an unqualified buyer has little idea what s/he can truly afford, but even the most optimistic of buyers won't relish the humiliation of trying to buy a home and being turned down by the lender after contracts have been signed. Any reasonable buyer would prefer to know in advance if s/he can buy and in what range.
Buyers who are motivated to buy will do what it takes to put themselves in the most favorable position to strike at the right home. They will allow themselves to become prequalified to buy. Unmotivated buyers can look at homes until the cows come home in complete comfort because they are being supported to do so by a real estate industry that allows such behavior.
The absurdity is that these same agents may even be hurting their own incomes as they allow their time to be tied up by unqualified buyers or allow homes to be tied up in escrow that have no hope of closing. Is having a shot at procuring cause worth it?
A much safer practice would be to assure all sellers that only pre-qualified buyers, under contract to a licensed agent, will have access to the home, so that should an offer occur, it has a greater chance of closing.
Although it would take some doing, it could become a competitive advantage for listing agents, as well as for buyer's agents.
How much more professional would practitioners appear to both buyers and sellers if the industry protected the seller by only allowing qualified buyers to view listed homes?
This could have a profound effect on the industry. Many real estate leaders are looking for a way to "take back the industry" but they are looking in the wrong places. While they argue over whether or not to allow agents to have VOW sites, they have forgotten who is looking at these listings. Should unqualified buyers be allowed access to those listings?
Maybe having higher standards of customer service in terms of protecting sellers' security by only allowing qualified buyers to view the home, online or off, could go a long way toward achieving that end.