As we state in our scripts for Talking Finances, finances may be a delicate topic, but they have to come up at some point. Many Experts wonder, however, when and how to bring them up. We consulted some StreetEasy Business Advisors and gathered their thoughts on the matter. Here’s what they had to say.

Don’t bring it up right away

We recognize that it’s not only helpful, but necessary to find out if a client is pre-approved for a mortgage. However, avoid bringing this question up right away. “This directly worded question can be scary for first-time buyers, and the goal on every new call is to radiate warmth,” says Kara McMahon, Business Advisor. 

That doesn’t mean you can’t discuss finances at all during the first call. Just don’t make it the first thing you ask about, and be careful with your approach. Keep your focus first and foremost on the person at the other end of the call.

Have a soft approach

Rather than asking financial questions abruptly and directly, Business Advisor Carlo Romero recommends taking a softer approach. Ask more open-ended questions, such as:

  • Have you thought about financing?
  • Will this be a cash purchase, or will you be looking to take out a mortgage?
  • Have you thought about where you would need to cap your monthly mortgage payment?

“These types of questions get the client talking about financing, and can make all the difference in getting them to open up and follow your lead,” adds Carlo.

Cover all bases

Don’t assume your client knows all the costs associated with buying a home in New York City. Be sure to point out costs they may not be aware of, or that are often overlooked. For example: a 30% down payment requirement, $5,000 monthly maintenance fees, or a debt-to-income ratio of below 25%. 

It’s helpful to lay out the closing costs, too – perhaps using our handout on estimated Buyer Closing Costs for Co-Ops, Condos, and Townhouses.

“Point out financial considerations they may not know about regarding the property or building, to show your expertise and get them talking,” Carlo says.

Facilitate the mortgage lending process

If your client is going the mortgage route, don’t just leave the conversation at that. Instead, help them start the process and connect with a mortgage lender. 

“If you give a client homework, it will be a challenge to keep the momentum going and you will often lose sight of their status,” Kara adds. “I recommend introducing the client to one of your lender references via email. The hand-off will ensure that you remain in control of the process, and the client will have one less task to do. It’s complicated, and any simplification makes a difference.”