Here is a woman burning with desire to buy a house. For years, she worked towards saving money, cleaning up her credit rating, all the while pining for a house.
Because of the language barrier, she has to rely on both her son and her daughter to help her in the process. So they go to the bank. She gets preapproved. She's ready.
Step by step
- The first time that we met, I walked them through the process. I even gave them a Home Buyer's Guide and asked that they read it so that they know what to expect.
- I asked them to get prequalified. They said they already did, and handed me their preapproval letter.
- I call the lender, he confirms they can afford to buy a house.
- Then I gave them ideas on where we can look for homes in their budget.
- We find her a house, a really nice bank-owned, in San Leandro, CA
- We write a contract. Every step of the way, I explain the terms, the conditions, the timelines, the rationale. They seemed to understand.
- I give them a printout of the estimated costs and the monthly payments. They said okay.
- We submit an offer.
- We get a verbal acceptance, pending some changes on the terms and their acknowledgement. I immediately call them to come back to the office so that I can explain the next step.
I truly wish I delved deeper and made sure everyone was clear on what to expect.
Does this buyer really understand?
So I call...and then I call...and I call again to both mother and daughter. Finally, after two days of repeated calls, the mother calls me back, wailing! 
...She says she thought she should have gone through government financing (she must mean FHA). Before writing the offer, I asked them what type of financing they wanted to do. They said conventional. Guess they didn't really know the difference, or their lender didn't offer that option.
....she didn't really want to go to the bank (she calls "private funding.") Guess she didn't understand that the bank could also do FHA loans.
....she didn't know she needed money for closing costs. Both the lender and I explained that there would be closing costs. I even printed a summary of the estimated closing costs, and reviewed each item. Guess that also went over her head.
...she only had so much for a downpayment. Before looking at houses and before writing an offer, I asked her if she had enough for the downpayment and the closing costs. Both she and her children said yes.
...she thought she had 17 days to think about it. Before we wrote the offer, I tried to explain the loan approval/appraisal and buyer investigation process, and that they will need to pay for the appraisal and the inspections)
...she doesn't seem to sense the urgency to respond. I had left messages for them that I needed to see them so that I can walk them through the process again, and each time, I said it is urgent that we have a face-to-face meeting.
Changing the terms and conditions
I will ask the mortgage consultant if they qualify for an FHA loan. That would mean changing the terms of the contract --- amount of downpayment, and length of escrow. If the seller (this is bank-owned) agrees, then we can move forward.
Otherwise, it's back to square one. And I hope that the next one sticks.
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