My experience has been that the lender will provide a great pre-approval letter.   But the best, for me, is one from their actual banker rather than a (questionable) mortgage company in this day and age.

Also, assuming they'll be putting down quite a bit of cash as part of the purchase, get your proof-of-funds documentation soon so you'll already have it when you want to make a late night offer.   Again, I've often used a letter from their personal banker stating that "Mr. X has more than sufficient funds to produce $300,000 at closing", and then back that up with a print-out of some of their online accounts (IRA/401K, Mutual Funds, Stocks) with the account numbers blacked out) showing that they have much more than the downpayment on hand.

This is a great topic, Cathy!  I'm looking forward to advice from the BIG hitters out there!  Tim and Susan!  Mike Farmer!  Candice!  Come on down!

I'd probably research the home they live in now, or find other property they own to satisfy myself.  I mean, if he/she has a biz card that says CEO of Xerox, you're golden, but if they are just Joe-Blow from Idaho to you, I understand you'd want some assurance that they could buy in the neighborhood that you are showing them.

So is this potential a Buyer or a Seller?

OK, Cath, here's the deal babe and it's really, really profound.

No dee-fer-ahnce.  :)

Get proof of funds, just as you would with a lower dollar buyer.

The trick is not to be flustered. Big or little are still green bucks.

BE Cool cool coool! As soon as they see you sweat or starry eyed, they will bail.

I too would do some of your famous research to see what assets you can discover in stealth, lest they be less endowed than they purport. Even then, since so often corps or trusts hold the assets . . . but find out what you can.

You attracted this, handle it. :)

But Candice, doing the research is the difference.  I rarely insist on qualifying my $250,000* home buyers before I will show them homes.  (*that's about as low as houses sell for here).

But I've been burned a few times especially on the high dollar stuff by out-of-town visitors, for example, who talked a bit game, but I'd find out later they couldn't pay attention!  

Now, to show a stranger high dollar homes I usually tell them that this particular class of seller prefers that all viewers are approved and funds verified before being allowed to see the home.

I will say that commissions aside, I'd prefer to work with Buyers in the more normal range ($300k to $500k).  For me, they have proved to be kinder, more polite and a better overall experience for all parties.

But, commissions count....so we take a deep breath and do the best we can.   I'd love a $2mil deal any day!

http://youtube.com/watch?v=0C654KRWGT0

Catz here is some inspiration for when you deal with the billion dollar babies!  :)

Phil, we agree, except I qualify all my buyers. I don't think ANYONE should waste our time without ability to pay in ANY amount. Low or high.

A big deal is often easier than a little one in terms of buyer savvy.

Sending you a 2m deal!

The buyers know they will have to prove their viability.

The secret I think is being tactful and business-like so that they don't think you are treating them like a first-time homebuyer. You are requesting the same thing, verification, but it's all in how you request it. From my experience simply telling them the seller will need verfication from their financing source is sufficient. they will know.

The last one I did had Merril Lynch send a letter verifying the buyer has sufficient funds for the price in question.

One thing the buyer will have to consider is the changes in jumbo loans -- they are getting expensive and more difficult to obtain because investors are backing away from them in this environment.

Cathy-Candice is right...it is no bigggg Deal.  Ask probing questions to find out if they have done this before. What other properties have they purchased?  It wouldn't hurt to ask the name of their personal banker.  In my experience, their personal banker usual is the President of the branch.  Give him a call.  He will give you what you need to know. Otherwise don't flinch and act like you have done this before.  The offer is the same paperwork.  Get them on paper.  Last week I showed a couple a home on the coast for 2.2 million.  The wife fell in love with it.  He offered $1.5 million.  We are still trying to get him up.  It is just numbers.  Good Luck-Keep Smilin

www.calgriffin.com

[Mikey sez: The secret I think is being tactful and business-like so that they don't think you are treating them like a first-time homebuyer.]

Yes. Or acting like a first year agent.

Interestingly, the higher end the buyers I've had, the easier to get the proof of funds and usually, they will be the first to bring it up or mention that they will be prepared.

The ones who argue are usually the ones with beer bankbooks . . . LOL and not even good beer. . . .

Cathy I think what you will find is that they are actually easier to work with high end buyers in the finance area because they get pretty quick action when they call their banker. I have never had any that I had to arrange financing for because they will come prepared and they already have the connections. I just advise them because we are going to be looking at high end homes we need to show availability of funds. They normally pick up the cell phone and ask where do you want it sent. If they hesitate that is when you have a problem.

That is the only difference and that is a good thing! Good luck!

Candice is absolutely right.   Only difference that I can see is how you treat how much you might offer.  On a $200K house $50 may seem huge.  On the higher priced homes that can be very reasonable.  And Phil is right many of the MM$ will require a qualified buyer and in some cases the letter from their lender before you can even get into the front door.  You are going to have fun and if you have time before you show go preview.  Just like the lower priced homes you will soon see the differences in upgrades.

I don't know of any other doc used then what you would normally use, unless there is one required in your state.

Have fun!

Jana

once you close this one- it will be hard to go back to the $300K slums-Have fun!  We know that you can do it!

www.calgriffin.com

Cathy,

Great post.

All of the people who chimed in, great great responses. I am so impressed with all of the knowledge here.

and Cathy--you deserve a great commission. You hard working mama who has her priorities straight!!!

Hiya Catz! I know you will do fine!

I was an agent 6 months when my first MM$ crossed my path.

He was a millionaire from stocks etc. They were moving from FL and wanting a 2nd home. They came to look at a $400,000 and left with a Million. Easy right? Wrong! He decided to put $185,000 in EM. No lie!

Well that was fine with the seller of course, then he wanted to finance the rest. We had 4 wks to close, and a nice roomy 14 bus. days to have commitment letter etc. Again, no prob right? Wrong...the lender called me over and over. Could not get stock account docs from buyer, tax returns, yada, yada. The more he pushed the more arrogant the buyer became until one day he simply said" I don't need the house as much as they need me, I will just walk away" After weeks of working on this(and he was no easy client let me tell you), what I realized was that I was treating him like I do my 2-300,000 buyers. Being clear and nicely forceful in direction etc.. He was about to walk away.What I did?I called the listing agent in a tizzy (she was experienced in this price range) and she had some wisdom to impart, I listened and followed her advice. I called him up and told him how much I had learned about business during this time spent with him on this transaction etc. Stroked the ego back down and told him I would take care of the lender etc pressuring him, I knew he had the $$, he was just wanting control.He was flattered and felt back in control, he produced the docs next day.How much of that was me being new and how much was him? Who knows, 50/50?  Are all like that, I hope not, they have not been in my experience, I have gone on to have relatively smooth higher end transactions but I have not forgotten the lesson of being stuck in a certain mentality with a client it did not fit. I disagree that all are the same. There can be very interesting twists to these deals with egos and personalities. Although I have had buyers/sellers act similar in lower ranges too... just my 2 cents worth~

I'm glad you asked the question, Catz...every transaction I do seems to be worth more than the last.  Not a bad thing at all.  When I finally top the $1MM mark (working on $750K right now), I want to be ready, too.  Looks like it's the same stuff, I just need to wear nicer clothes!

Cathy, I may have told this story before but I hope it will help. I met a very nice couple looking from 1 to 2 mil. I was more than happy to give them the 2 hour tour of Charleston to get them familiar with the area. When they wanted to come back and view homes, I asked them how they were planning to purchase, finance or cash. They said cash.

I said that the sellers of the homes in the price range they wanted to view want to make sure the buyers were qualified buyers. Just as they would want people who might be viewing their home to be qualified buyers and not just lookers or worse.

I asked them to provide proof of funds on their next visit. When I met them on the morning of the home tour, they brought a 2 inch thick file folder showing a net worth of 6 million plus. We hopped in the car and started looking. If they are for real, there is no problem, if they aren't, watch out.

Vanessa that is a really good story! The lesson is that we ALWAYS learn SOMETHING from our clients. Just think how much that empowered you!

My first sale was for $910,000, not quite a MM$ deal, but still nice.  All great advice given here and mostly matched my experience.  You do have to be sensitive to the buyer's feelings and concerns.  They expect a higher level of service, and quality in the home.  Keeping the deal on track after the home inspection was very stressful when the seller wouldn't fix every item in the report.  Now, how can I find more like this :)?

I'm late to this party and have nothing to add to what has been said already other than a hearty CONGRATULATIONS!

To reiterate a few points already made, MM buyers are really no different than any others (the blanks on the contract just get bigger numbers); they are usually easier to work with because they understand the process and tend to make quick decisions and you don't have to do a lot of educating (just ask for the documentation you need and they will get it);  just be yourself and relax!