Champagne Budget - Real or Perceived?

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Real Estate Agent with www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 228209

Champagne Budget - Real or Perceived? Find Out BEFORE You Shop for Homes in Charlotte NC!

Charlotte home shopping -champagne taste, beer budgetThis topic has been discussed repeatedly but, it certainly bears further conversation as the issue repeats itself, creating problems for everyone involved.

My mantra is that you must have a pre-approval letter before getting into my car.  Granted, I spend more time with sellers these days than with buyers but, my buyers agents spend 100% of their time with buyers so, I’m speaking on their behalf here.

I’m generally a trusting soul--when a potential buyer phones me and is seriously interested in purchasing a home in the near future, my first two questions are:

  • Are you working with a real estate agent?
  • Have you spoken with a lender and have you been pre-approved?

If the answer to the latter question is yes, I ask them what their pre-approval involved and we discuss the price range of homes that they would like to remain in when they purchase.  

Many of the recent prospective buyers have stated that they have these pre-approval letters and are armed and ready to go!  Let’s just say their price range is supposedly $300,000.  They are then partnered with a buyers agent who matches their area/lifestyle needs and the search is on.  

More often than ever before, I’m getting calls from agents that the buyers are not qualified for the amount in the price range in which they are searching.  They have been shopping online for homes in the $300,000 range and only qualify for a home in the $200,000 range.  

Charlotte home buyer tips - Find out first if you're on a beer budget

This ‘fatal error’ has not only cost the buyer time but, the agent’s time has been wasted as well.  The worst part of the situation is that this buyer has been eyeing several $300K properties and now they are going to have to ‘settle’ for a $200K property--quite a difference in our area.  It’s difficult to ever then find a home in the price range for which a buyer truly qualifies when they have been looking at the champagne homes!  

So, for your best interests, your smartest move BEFORE shopping (even online) for homes is to consult a lender to obtain a pre-approval.  It really doesn’t take that long and can even be done over the phone.  Give us a call, we’ve got a great list of lenders to share with you!

This quick, easy and painless process can save you hours and hours of home shopping and can save you from heartbreak when your champagne tastes are truly a beer budget! 


And, hey, there’s nothing wrong with being on a beer budget--oftentimes we ALL need to be reeled back in to acknowledge that we’re on one!


Have you been pre-approved for a mortgage loan?  Here's a great place to start your home search:

Search Charlotte Homes for Sale

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Cheryl Ritchie 03/27/2012 10:18 PM
Topic:
Home Buying
Location:
North Carolina Mecklenburg County Charlotte
Groups:
North Carolina Real Estate
Posts to Localism
Charlotte North Carolina Area
Diary of a Realtor
Buyer Information - What Buyers Need to Know in Today's Market
Tags:
home buyer tips
charlotte home buyer tips

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Rainmaker
1,560,731
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Wonderful article Debe.  Just yesterday I toured a home with buyers.  They are pre-approved for almost double compared to the home we toured, but they wanted to see lower priced property.  As we discussed the home, I mentioned that for someone in the <$250,000 price range the property would be a wonderful home.   But, for someone looking at higher end homes, this darling property WOULD be compared to the higher end.  And that attitude of "settling" WOULD be felt.  Again, for someone with their price range already in place there's no disappointment, and it would be APPRECIATED finding a home in such a good location and condition!  You've inspired my next post!  ;-)

Mar 26, 2012 04:01 AM #15
Rainer
51,228
Jeanne Gregory
RE/MAX Southwest - Sugar Land, TX

Yea, if you will have "no problem" getting financing, why don't you go ahead and do that now.  It's like shopping with a blank check.  Pre-approval, then home search.

 

Mar 26, 2012 04:31 AM #16
Rainmaker
571,718
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Debe, Other than the natural propensity to want something a little better than the low hanging fruit many buyers have been conditioned to believe that there are so many distressed properties available that the price range is meaningless.

Mar 26, 2012 05:14 AM #17
Rainer
284,418
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Debe - if they say they are pre-aproved, then they should be able and willing to let you talk to their lender to verify the amount of loan they are pre-approved for.  It only makes sense.  Then nobody gets a nasty surprise down the road -- not the agent, not the buyer and not the lender.

Mar 26, 2012 05:21 AM #18
Rainmaker
920,312
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

Debbie - It's really hard to go down in price after looking at the bigger, newer homes. I rarely have that problem, but we may all experience it if the interest rates spike up like they did last year.

Mar 26, 2012 06:28 AM #19
Ambassador
876,846
Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Debe, there is nothing worse than loving something out of your price range. Nothing will ever measure up after that!

Mar 26, 2012 07:52 AM #20
Rainmaker
664,092
Kathy Stoltman
Rockwood Realty - Ventura, CA
Ventura County Real Estate Consultant 805-746-1793

Debe, I think this needs to be taught in grade school!  I joke of course, but holly smokes most buyers have no idea, thanks for the post.

Mar 26, 2012 10:13 AM #21
Rainmaker
436,565
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Debe, What do you say to people that tell you they will pay cash? Do you have a tactful way to verify their funds?

Mar 26, 2012 11:07 AM #22
Rainmaker
244,734
Bonnie Vaughan
Scranton, PA
CNE SFR - Buyers/Sellers - Lackawanna & Surroundin

Debe I've seen many buyers who start out with "Great Expectations" who later make the adjustment to reality.  I try to get everyone to do a want and need list.  Everything they need in one column and everything they want in the other. 

Mar 26, 2012 11:20 AM #23
Rainmaker
420,736
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease

Debe, 

Knowing where you should be looking in terms of price point  is KEY!  If you look at homes that cost more than you can afford, NOTHING you look at in your affordable price point after that will look very good. 

All the best, Michelle

 

Mar 26, 2012 11:47 AM #24
Rainmaker
1,333,848
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Debe - Excellent post!  This is something I've written about more than once and I guarantee I'll write about it a hundred more times.

Mar 26, 2012 12:16 PM #25
Rainmaker
905,441
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

Debe~ Not to mention the PRICE OF GAS these days.  It doesn't pay to drive clients around without some serious discussion.

Mar 26, 2012 12:22 PM #26
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1,229,656
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County
What's the phrase exactly... champagne budget and caviar dreams. Probably best for those who can actually afford it. Another nice post.
Mar 26, 2012 12:43 PM #27
Ambassador
1,703,510
Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Debe, I just spoke with a buyer today. No pre-approval in hand. I gave her the number of three lenders and told her to contact me once she has her pre-approval.

Mar 26, 2012 02:19 PM #29
Rainmaker
1,550,305
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Amen, Debe.  I'm amazed at how often the buyer will say, "I just want to look for a little while, and I see something I'll get the pre-approval letter."  That's why you say, "OK, we'll take your car."  8-)

Mar 26, 2012 10:35 PM #30
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Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Awesome post Debe . .you were due for a featured blog already. . 

your fan!

Mar 26, 2012 10:41 PM #31
Rainmaker
1,376,417
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Debe, this is an excellent point. Another problem I see is buyers look at properties above what they are qualified for because they think they can purchase a higher priced home within their price range. Pre-approval letters are a must.

Mar 26, 2012 10:56 PM #32
Rainmaker
215,151
The Brewer Team - Benchmark Realty
Benchmark Realty - Franklin, TN

Hi Debe - If you plan to buy a home in Franklin or Brentwood you had better be prepared, because the homes are moving fast and the difference between a contract and an offer, may be the time you didn't spend getting your financial arrangements in order before you found your dream home.

Mar 27, 2012 12:57 AM #33
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533,485
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Beer budget?  I don't have a clue what that involves ;)

Mar 27, 2012 05:31 AM #34
Rainmaker
1,364,196
Cheryl Ritchie
RE/MAX Leading Edge www.GoldenResults.com - Huntingtown, MD
Southern Maryland 301-980-7566
I do the same thing. No Pre approval letter in the file, no keys in the Jeep ignition.
Mar 27, 2012 10:20 PM #35
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