When Bad Things Happen to Good Buyers

Oh yes, I've heard of these scenerios.  Esp with the first time buyers--you really have to coach them on not buying lots of home furnishings just before closing, or opening up a new credit card. 

Real estate can be an emotional roller coaster.  Real estate is stressful.  Add finances, credit concerns, record-keeping, and applying for a loan on top of it?  It can get or be explosive.  

What could possibly go wrong with all that, Jennifer Monroe??? 

Gene

I've had to leave the room more than a few times to let them hash it out.  Marte Cliff, I haven't lost one to a divorce yet, thank goodness.

Very good points to bring up at the start before it becomes an issue!

We had a buyer who was prequalified as a W-2 employee. When the lender obtained the buyer’s tax returns it turned out that he played in a band. He wrote of legitimate business expenses – such as depreciation – that reduced his income and tax liability. The reduction in 1040 reported income dropped him below the required debt/income ratio and he no longer qualified for the loan.

Another lender stepped in and saved the day but it was a stressful time!

I love this list.  We could all add stories and the list would go on forever.  I had a client who quit his job because he didn't like it!  The bottom line is that it is difficult for buyers to understand that there are strict lender guidelines.

Jennifer - We certainly have to counsel our clients on a number of things.

When I was in lending, I had a buyer go out and purchase a new car a week before closing. Guess what, he lost the house.

Last minute purchases or even attempts to get credit for a purchase AFTER the Closing have been my biggest issues.

We always give buyers a Top 10 list of "no-no's" during the buying process. It includes not cosigning for anything, not buying anything on credit, and not letting anyone run your credit.

As for fighting, they are on their own!

I think that I've had almost all of these scenarios at one time or another.  It's so hard to keep home purchase excitement from taking over the buyer's brain and making them forget the loan and finance guidance they have been given. 

Did you really just say " starts your newly minted Buyer Agency Relationship with dour predictions?"

James Fenimore Cooper could take lessons from your prose. Cool.

Jennifer Monroe - working with clients requires lots of patience! Not only we have to manage the transaction, we have to warn them for many things that they must stay away from! Bad things can happen to good buyers - however, with proper education and setting the expectations right from day one can avoid most of this.

Any of us who've been in this business for while have experienced some or all of the issues you've raised. I remember years and years ago "firing" a buyer couple that had been referred to me because they needed a marriage counselor way more than they needed an agent.

Those are situations that many buyers have faced, and it's never a pretty scenario.  Great post, Jennifer Monroe! 

I'm utterly shocked!  Most couples fight??? 

How true  I always tell people before they buy a house together they need two things - a blood test and a credit report check - LOL!

It's very important to advise buyers of things that can cause problems for them if they're not aware of them ahead of time.  Most people don't think twice about doing something like buying new furniture a few days before closing because they think it's a done deal but for some buyers it can cause a problem.

The shocking credit score dive...oh no!!! I had a buyer who closed a couple of months that had all in place and then started charging up the AMEX.  It was work related but hit hard on the credit. Thanks to our loan expert we survived!