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The Budget Constraint: why some buyers aren't buying!

By Ricardo Bueno

Mortgage and Lending with Diverse Solutions

December 10, 2007 12:42 AM

The Budget Constraint: it's what the consumer can afford!

Let's think of it from the buyer's perspective...

We all want to increase both the quality and quantity of the goods that we purchase/consume. We want:

Exotic vacations
Expensive cars
To eat at the most expensive restaurants

We only consume less than what we actually desire because our spending is constrained by our income. Then we see rising gas prices and that certainly doesn't make us feel well about the new gas guzzler we purchased. And you can forget that $35 steak platter, we're doing In-&-Out tonight!

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Bill Gillhespy

16 Sunview Blvd - Fort Myers Beach, FL

Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Ricardo, Good reminder that buyers need to show some restraint. Too bad so many buyers threw caution to the winf during the last cycle.

Dec 10, 2007 12:48 AM

Matthew Rosov

Amerisave Mortgage Corporation - Laurel, MD

Certified Mortgage Planning Specialist

Ricardo - Nicely thought out and to the point. Don't suppose you are willing to share how you are keeping up on business?

Dec 10, 2007 12:49 AM

Jess Rankin

Pickering Group - Phoenix, AZ

I like your name logo. Good post!

Jess Rankin, Pickering Group

Dec 10, 2007 12:56 AM

Ricardo Bueno

Diverse Solutions - Los Angeles, CA

Bill: it's important that we study our income and spending habits. It's easier to spend money than it is to earn it. If you're thinking of Buying in this market, it's less about the representations of the media and more about your consumer spending habits.

Dec 10, 2007 12:58 AM

Matthew: thank you very much! So you want the trade secrets huh? Hmm....

Jess: thanks for the compliment! it took me a while to find something...this was simple yet elegant.

Dec 10, 2007 12:59 AM

Heather the Realtor Orlando, Lake Mary

LemonTree Realty - Orlando, FL

First Time Home Buyers, Bank Owned Homes

Richard great blog. I think it's ashame many of Gen Y & Xers werent taught how to budget and save and with us being bombarded with this lavish living most people have gotten themselves in over their heads. It's a gentle reminder that its important to save money and not live the good life all the time. Your Orlando & Lake Mary Real Estate Expert, Heather Joubran

Dec 10, 2007 01:03 AM

Kathy McGraw

CELLing Realty - White Water, CA

Riverside County CA Real Estate

Ricardo-Short, Sweet, and to the Point.....We can't continue to spend what we don't have :) and the economy on the whole keeps raising the cost of our "must have's" and that leaves less money for our "discretionary spending"......

I'll take my In-and- Out with a chocolate shake please :)

Dec 10, 2007 04:34 AM

Tom Braatz Waukesha County Real Estate 262-377-1459

Coldwell Banker - Oconomowoc, WI

Waukesha County Realtor Real Estate agent. SOLD!

Hi Ricardo,

Thanks for the post, I always take something postive with me after reading your posts

Sincerely

Tom Braatz

Dec 10, 2007 05:13 AM

Heather: very many have gotten themselves in over their head and they start early! Those credit cards start arriving in High School believe it or not. When you start thinking of a buying a home, all of these little expenses start to play into your psychology. And at the end of the day, it's not that you can't afford a home, it's just that you need to budget a little bit better. You can live the good life...there's nothing wrong with living it on a slightly more conservative budget.

Kathy: I'm taking your advice "short, sweet and to the Point"

Much less for our discretionary spending. And with guidelines getting tighter, people should expect the standard for down payments to rise!

In-&-Out sounds good right now but I'll make mine a strawberry shake.

Tom: why thank you for the compliment. I've always hoped that I wasn't coming across as negative!

Dec 10, 2007 11:17 AM

The Budget Constraint: why some buyers aren't buying!

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