LENN, WE HAVE 5% OF OUR OWN MONEY COMING IN BUT NO MONEY LEFT OVER FOR FOOD.

Anyone selling real estate today knows how persnickety lenders are about

Qualifying Ratios
Money to Close
Gaps in Employment
Sourcing Deposits

I don't fault the loan officers.  They are working under very strict and difficult circumstances.  This is one reason why communication between the loan officer and the buyer's agent is so critical.

AGENTS WORKING TOGETHER.  One of my agent referrals in Montgomery County was not going well because the buyers were ready to buy, but short on cash to close.  The referral agent whom I've known for years called and said that he didn't believe they would qualify since they were short of money.  We were sure that home would sell quickly because it was a jewel. 

We made a lender referral with a known local loan officer.  The contract was written and ratified but the buyers were not quite prepared with the money needed to get a fully approved loan.  They needed to show 5% of their own money to be able to close their loan. Closing costs would be 3% from the seller and the balance in a GIFT from the buyers' parents.

Fortunately the sellers were very comfortable with the contract, carefully prepared to show the Buyer's Financial Statement, the "Pre-Qualified" letter from a local lender (with permission for the listing agent to speak with the buyers lender), the evident employment stability of the buyer (husband) and the sellers thought that the buyers' baby was adorable. 

WHERE WAS THE MONEY TO CLOSE GOING TO COME FROM?

1.  A gift from the buyer's parents for 2%, with the gift letter signed and the money deposited in the buyer's account.
2.  Income stream from the buyer deposited IN FULL in the buyers' bank account.
3.  No withdrawals from the account until the 5% was accumulated, which would be in about 5 weeks.
4.  3% seller contribution. 
Grocery

O.K.  Sounds good and the numbers work with Mom and Dad and the sellers paying closing costs.

Every dime accounted for except that left no money for food.  Details, details.

"I'll bring the bananas."  What we all did was take turns taking the buyers to the grocery store weekly and buying food for the coming week.  They already had a good supply of staples and needed only fresh fruits, fresh vegetables and bread.  We each combined shopping for our own homes with the needs of the buyers and pretty soon, that 5% was in their account. 

This type of buyer representation takes very open communication between all involved in the transaction. 

I'm known as the "agent with the bananas" and I've received two referrals from those lovely buyers and one referral from the seller.  

Courtesy, Lenn Harley, Broker/Agent, Homefinders.com, 800-711-7988.


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Post is included in group: Creative Solutions That Saved The Deal

25 Comments on I'LL BRING THE BANANAS - MOM AND DAD WILL BRING THE $$$$

20 Most Recent Comments Displayed Show All

MAY
24
2012
1,389,077 Points 255 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Lenn that is going above the call of duty on your part

Sourcing deposits is becoming a real pain in the donkey.  Even small amounts are being questioned these days.
4:25pm • #6
630,146 Points 100 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Way to pull together to help the buyers out Lenn.  Can I send you my grocery list lol :)!  Just kidding, but that is pretty terrific that you all came together to make sure your buyer not only had a home but food to eat :)!  
6:49pm • #7
MAY
25
2012
1,012,482 Points 84 Featured Posts Called Shot Master

If anyone could make it happen, that would be you Lenn, the "agent with the bananas"...........very cool.
1:41am • #8
1,980,651 Points 484 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

Lou.  That is a fact.

George.  Indeed.  I'm going through that with a buyer now.  We're down to pennies for the 5% and the lender is sourcing every single penny.

Brenda.  Working together was the key.

Roger.  Thanks for the kind words.

 
3:22am • #9
1,057,921 Points 246 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Lenn- and THAT'S why I knew Emily would be in good hands!!!  A true Pro!
10:59am • #10
1,053,571 Points 397 Featured Posts Outside Blog Attended Rain Camp Called Shot Master
Well sounds like a good solution to get them in the house. But now what do they do? How will they be able to maintain the property and pay for repairs when they come up? My opinion is these folks needed more time to save. I do hope it works out though.
11:07am • #11
159,298 Points 2 Featured Posts Outside Blog Called Shot Master

Interesting. That was cutting it really close. Glad you went above and beyond the call of duty, but I am with Bryant, how are the buyers going to afford the house? Was it the amount of cash needed in reserve that cut them short?
11:27am • #12
382,396 Points 5 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Lenn, 

LOVE this making it happen and working together attitude.  Anna B better watch out, she will lose top Banana billing:-)

Being careful looking out for your clients will never go out of style.

All the best, Michelle
11:30am • #13
235,133 Points Outside Blog Attended Rain Camp Called Shot Master

Lenn -- thanks for the great story of "thinking outside the box" that makes your business so extraordinary.

Have a fantastic holiday weekend!
11:42am • #14
564,585 Points 152 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

That's a great story, Lenn.  That's why you're at the top of your game.  Good show.  I know the buyers will share that story for years, and I have feeling referrals will flow. 
1:03pm • #15
1,980,651 Points 484 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

Kathy.  Thanks.  I couldn't help Emily because Emily and Mr. Emily were working at cross purposes.

Bryant.  Not a problem.  Their ratios were very low, about 20/26.  They were just not prepared with 5% down when the house across the street from them came on the market and they decided to buy NOW.  The have far more than needed for maintenance or emergencies, just not 5% down in 37 days.  For folks with limited income, I don't want to see them left with no reserves either.  I do give folks a Free One Year Home Warranty.  I'm very Conservative when it comes to budgets.

Dale.  They're fine.  It was the sudden 5% down that they weren't prepared for when that house came on market.

Michelle.  Thanks.  Taking care of clients is what we do.

Steven.  Thanks.  I plan to and you too.

Mike.  I love that story.  I made good friends.

 
2:53pm • #16
511,443 Points 12 Featured Posts Called Shot Master

Now, that is a great story.  And, similar to one I have done.  But, I never actually bought the bananas.
6:09pm • #17
1,670,641 Points 138 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I absolutley love this story and the fact that everyone did what was necessary to make it happen. 
7:48pm • #18
1,363,859 Points 42 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Lenn - It sounds like all of you went above and beyond, and fortunately these were buyers who could follow the plan.
8:40pm • #19
231,209 Points 2 Featured Posts Attended Rain Camp Called Shot Master

Lenn, it it very a nice and shows how you care about your client but on the other end it is terrible example of what that family is thinking when there is no money left for the food. I hope that that's just extreme down payment issue and they will have enough money to cover their mortgage and living. When I think about this situation I wonder where I can find that kind of lender to refinance my investment property from 8.24% to something up to current market. We are not qualified even have been paying that loan for 8 years with no problems and our own house mortgage was reduced after 5 years and several payments towards principal from $1600 to $400 per month. Go figure.
9:53pm • #20
MAY
26
2012
1,168,364 Points 159 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

What a great story, Lenn.  I love the team work here and love how it all worked out in the end.  I'm sure they've had fun looking back at this.
3:14am • #21
1,980,651 Points 484 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

Dan.  Bananas, apples, etc. kept their cash in their bank account.  That was the goal.

Judi. That is what we do.

Christine.  They did follow the plan, to the penny.

Anna.  My post didn't indicate or even hint that they would strapped for cash after settlement.   They merely had to leave their automatically deposited pay in their account for 5 weeks so the 5% needed for the down payment was there for the lender to verify.  Following settlement, they had more than sufficient cash flow for living and significant savings.

Debbie.  Yep.  They thanked the agent who brought the bananas.
4:15am • #22
185,435 Points 63 Featured Posts Outside Blog

Another chapter for your "Creative Financing" book! Unusual ways to make real estate deals happen!
5:07am • #23
319,713 Points 10 Featured Posts Outside Blog Called Shot Master

Lenn, absolutely outstanding solution! There are ways to make a transaction happen, however YOUR experience, ideas and leadership to make everything work clearly made the difference. This is one story they will tell their grandchildren. Congratulations!
5:10pm • #24
MAY
27
2012
1,980,651 Points 484 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

Jeff.  I love it.  I COULD write that book.

Emily.  Thanks.  Making things happen is our job.
3:15am • #25

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