How Much Does My Agent Need to Know About My Finances?
Money is a delicate issue. How much we earn and how much we owe is information many of us prefer to keep close to the vest.
If you’re concerned about detailing your finances to your real estate agent, rest assured that there’s plenty of privacy in the client/agent relationship.
In their wheelhouse, Real estate agents don’t need, or expect, you to disclose everything about your money. That said, they must understand your overall situation to help guide you to a home that’s within your budget.
An agent’s job is to negotiate a home purchase or sale on your behalf, keep the transaction on track and help you navigate real estate paperwork. His or her strength lies in understanding home values, and property and neighborhood features. Home financing is an altogether separate story from a home search or sale; therefore, agents usually don’t delve into your finances to crunch the numbers.
Leave it to the lender
Agents are happy to let your mortgage lender handle the financial questioning. A loan officer at a bank or mortgage company calculates your maximum purchasing power and your monthly payments based on your loan application, financial documentation and debt-to-income ratio.
Be prepared to supply your lender with your last two years of tax returns, recent pay stubs, bank statements and investment accounts. Agents then present a lender-generated preapproval letter to listing agents, indicating the amount you’re able to borrow.