Guidance For Getting To The Closing Table

By
Real Estate Agent with Classic Realty Realtor

It is Sunday Afternoon and it’s hard to believe but I actually have a bit of a slowdown today.  As a result, I thought I would write something that would be helpful to all present and future buyers of Real Estate.

I am reminded of when three or four buyers (over the past few years) made a serious error in judgement while in a Contract to purchase a house. Because of the error, they sabotaged their Real Estate deal that was nearing completion. You read the previous sentence just right, but let me be even clearer: They lost the house they were under contract to buy. Their error blew the deal!

What was the error that blew the deal?

Somewhere between the beginning of the contract and the closing table, they went out and Spent Money. How did they spend it? Sometimes it was buying Furniture on Credit; one time it was a New Car; and still another time – it was a pretty hefty charge on their Credit Card. For the record, I’ve also heard other horror stories from friends of mine who are Real Estate Agents in reference to their clients making similar mistakes in spending or juggling money between their accounts. (Juggling money will be for another post)

Here’s what is real about Real Estate and securing a Mortgage. A needless purchase, like described above while under contract to purchase a home, can shave a dozen or more points off of your Credit Score and if your score is border line, a few points can cost you the deal.

Please keep reading:  If you are currently or are soon going to be in a contract to buy a house, please put away the credit cards. Do NOT make any purchases on any kind of credit and even guard against making unnecessary transactions using your checking and/or savings accounts. Then, in all probability, the mortgage pre-approval you will have secured at the beginning, before going house hunting, will carry you through to the closing table. You will have purchased a house and will have the wonderful privilege of making that house your new home.

There you have it - Guidance For Getting To The Closing Table.

Comments (74)

Keith Shoemaker
Florida Homes Realty and Mortgage - Jacksonville, FL
Keith Shoemaker

Good advice, banks are really tight with underwriting now.

Aug 13, 2013 07:02 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

I have never had it happen to me with my clients, but I've heard tell . . . I did have a guy NOT be able to get financing because of his recent loan on his car.  

Aug 13, 2013 08:38 AM
Jay & Michelle Lieberman
Keller Williams World Class - Agoura Hills, CA
Creating Calm in the Buying and Selling Chaos

Ahhh.  The old here is all this money in my account and then after approval, where is all the money?

Aug 13, 2013 09:15 AM
Clay R. Seay
Florida Homes Realty & Mortgage - Saint Augustine, FL

The value of delayed gratification. Waiting until after the closing to spend is critical to step one, having the home first. It is a shame to have nice new furniture without a home to place it in or a new car without a driveway to park in. Good points for all Buyers

Aug 13, 2013 10:00 AM
David Spencer
Keller Williams Northland - Kansas City, MO
Show Me real estate in Kansas City

This is why I prefer ethnic buyers. they are very popular because they pay with cash. I remember a closing thrity years ago where the price was contained in a suitcase. Cash at closing is not permitted today.

Aug 13, 2013 10:22 AM
Jimmy Faulkner
Florida. Homes Realty & Mortgage - Wantagh, NY
The Best Of St. Augustine

A buyer can make a real mess of a contract when buying a home. They sometimes feel like they  accomplished a great thing by signing a contract for sale. Lest celebrate an buy the new furniture now before we move in to the new home. Maybe a new car  would be a reward for our good fortune. Well the end result usually means no new home. Educate your buyers.

Aug 13, 2013 11:08 AM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

When I meet with buyers one of the things I cover is "The talk".

 

Please keep reading:  If you are currently or are soon going to be in a contract to buy a house, please put away the credit cards. Do NOT make any purchases on any kind of credit and even guard against making unnecessary transactions using your checking and/or savings accounts. Then, in all probability, the mortgage pre-approval you will have secured at the beginning, before going house hunting, will carry you through to the closing table. You will have purchased a house and will have the wonderful privilege of making that house your new home.

Aug 13, 2013 11:55 AM
Rosie Moore
Serving Sugar Land, Richmond, Rosenberg, Missouri City - Sugar Land, TX
It is important to keep reminding buyers about this. Their finances are under a microscope until closing day. I include these reminders in my home buying packet for clients.
Aug 13, 2013 01:13 PM
Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407
Excellent way of driving home the importance of a maintaining a consistent financial picture from start to finish of the real estate transaction!
Aug 13, 2013 01:22 PM
Lynne Ruffin
Lynne RUFFIN - Norfolk, VA
Web Styles

Great advice!  Buyers are led to believe the transaction will not show up on their credit report until after the closing.  Failing to realize the inquiry normally shows up on their credit report as soon as the dealership runs their credit for the car purchase.

Aug 13, 2013 08:05 PM
Amanda Christiansen
Christiansen Group Realty (260)704-0843 - Fort Wayne, IN
Christiansen Group Realty

AMEN.  This is something we tell our buyers up front, and have our lender reinforce it throughout the process.  Every buyer should read this blog!

Aug 13, 2013 10:13 PM
Kelly Taylor
Keller Williams - Lakewood Ranch, FL

Excellent advise to everyone interested in buying a home. I always include this piece of advice and so far I have ben lucky.

Aug 13, 2013 10:55 PM
Lee Davenport
Sandy Springs, GA
Learn With Lee: Real Estate Coaching & Consulting

Vital information David!  It is imperative for Buyers to celebrate AFTER closing with new furniture even new vehicles not BEFORE.

Aug 13, 2013 11:36 PM
Jack O'Neal
HomeSmart Elite Group - Gilbert, AZ

All Realtors have had this issue, they need the big screen more than the house

Aug 13, 2013 11:42 PM
Brad Lauritzen
Santiago Financial, Inc. - Riverside, CA
Manufactured & Mobile Home Lending

As a loan officer I have a standard form that goes out to every buyer as one of my first documents "8 Mistakes You don't want to make during the loan process" and your comments are the bulk of it.

Aug 14, 2013 12:39 AM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Timing times three has replaced the location, location, location because if they can not buy and the debt ratios bloat, the credit rating explodes and rockets downward, the three "L"'s don't matter in the least.

Aug 14, 2013 12:54 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Is this ever so true. All it takes is one instance and we make it a part of the speech about the home purchase. I need to remind my buyers repeatedly to stay away from the credit cards, and also no in-store purchases like furniture before the mortgage is signed

Aug 14, 2013 12:56 AM
David Burrows
Classic Realty - Fairfax, VA
No Pressure, Just Seriously Devoted to Real Estate

To everyone who has stopped by. I am unable to write back as I would like to today, but am soooo grateful for you sharing your thoughts. And I thought I was the only one that had ever experienced clients sabotaging their own deal. (smile) My post and your comments reminds me that we must all work hard in sharing with our clients the danger of any kind of financial transaction that is sizable or involves credit while under contract to buy a house. While some will never listen - most will. Again, thanks for coming by.

Aug 14, 2013 01:20 AM
Tyler Soulliere
Windsor Realtor - Windsor, ON

This is great information for any buyer and will surely share this scare tactic with them. I've heard of other buyers who have went and spent all their downpayment or gambled it away as well. Unfortunate but it happens.

Aug 14, 2013 01:34 AM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi David, we had one fall through recently because they sold a car and could not satisfy underwriting how the money mysteriously showed up in their account.

Aug 16, 2013 03:02 AM