Real Estate Talk:
Qualifying A Buyer

Determining if the buyer has funds to purchase

By Joseph Marovitch

Listing brokers (broker that is contracted to sell a property) state they will qualify buyers before an offer is presented. To qualify a buyer is to determine if the buyer has the funds to purchase the property.

Sometimes the client mistakenly thinks “qualifying a buyer” means determining if the buyer can purchase the property and has serious intent to buy, even before a first visit.

Brokers are not allowed to deter other brokers from bringing clients and the assumption is if the buyer is visiting then they have intent to purchase, if they like the property.

When we qualify a buyer, what we do is request that the buyer has a pre-approval from a recognized financial institution or a letter of proof from the financial institution stating the buyer has the funds in the event they are paying cash and no mortgage.

Before a visit, a listing broker can ask the selling broker (broker representing the buyer) if their client has a pre-approval or proof of cash, however, if the selling broker says no, they are still allowed to visit.

Sometimes the client mistakenly thinks “qualifying a buyer” means determining if the buyer can purchase the property and has serious intent to buy, even before a first visit.

When the selling broker brings an offer, the listing broker can request a proof of cash or pre-approval accompany the offer. If there is not a pre-approval or proof of cash, the listing broker can shorten the time period for the buyer to provide proof of financing, thereby saving time and aggravation.

What the listing broker and seller do not want, is to go through the trial of due diligence including visit, inspection and providing documents only to find out just before or at signing that the buyer does not have the funds.

State Of The Market

According to a Reuters poll, there is no indication that home prices will cease to increase even though economists expect prices to be pulled back by high household debt and the lack of affordability to purchase these expensive properties. The factors driving market prices appear to be foreign investment, low interest rates and the psychology that if prices are rising in Vancouver and Toronto, they will keep on rising. This may be the case for the next few years. It may be a good time to sell but buyers beware. Eventually the market will drop and there is no rule that says buy high and sell low.

Previous issues

Buying a Condo
Perils of Overpricing
Promise to Purchase First!

Image: P Widling

Joseph Marovitch -

Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible to, Joseph applies this to his present real estate broker career.

Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or

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