So what do you do when your buyer is as dumb as a rock? OK, not everyone is a rocket scientist and these folks are first time buyers. But come on where does personal responsibility start.
The total story goes something like this. You explain in detail trying to make the words no longer than 5 or 6 letters with only 2 syllables. You provide them with a CD with characters speaking in English demonstrating through acting the entire process of home buying. Why you even give them not just a flow sheet explaining what act follows the next in the buying process. It also defines who is doing what where and when. What's more you even give them a check sheet that corresponds to the flow sheet so they will know who, what and were they are in the total process Single lined sheets with check sheets are suppose to be so easy a Chimp can learn to follow their course.) . You even make the outrageous suggestion that they do not make any financed purchases until the home purchase is completed and they have taken ownership a myriad of times... But when you inform them that the Buyer is requiring an additional $1,000 Ernest Money: The one change in the counter, they run to their credit union and get a loan for the ERNEST MONEY! No they don't take it out of available funds (savings and or 401K). They simply take out a personal loan with a penalty clause and at an outlandish rate. The loan is significantly high enough to cause the under writers heartburn! Who then contact the loan office, who calls you asking what is going on? You contact your client only to find out that they got the money as you had asked. But just one small thing they listened to their Credit Union who sold them a loan rather than taking the money out of their available resources. They took the word of an individual with in whom they had placed their trust. Why Ms X at the Credit Union has been nice and kind to them for all these years and she wouldn't misdirect them. Yeah sure..... Well, to make a very involved and detailed story short. After reviewing their paperwork from their friend at the credit union: Funds were immediately transferred so as to absolve the recommended loan from the credit union, a letter written and prepared for the underwriter which specified the resolution of the new debt. The end of this story is not necessarily a happy one. For despite all the running and straining to satisfy the delay was enough to prevent the buyers to obtain the lock in on the loan before it jumped two points. The deal has fallen through and although these good, hard working folks were able to get their Ernest money back they did not get the house they wanted and can't until the rate drops again so as to fit in their budget. But with what I have been told lately the first time buyer programs offered in this market will be dead very shortly. Leaving these good folks caught in that all too familiar position of having good credit, sufficient means to afford a modest house payment but falling short on funds for either closing or down payment. The reason being they didn't listen when instructed to not make any purchases and they trusted a loan officer whose behavior was... shall I say questionable at best. Of course this assumes that the buyers were straight with me in describing their interactions with the loan officer. Perhaps their wait will be short, who knows but at least they now have raised their level of awareness above that of the common variety rock from which they came.