I really didn’t want to make you cry, that isn't in my job description

By
Real Estate Broker/Owner with Respect Realty LLC 200311024

Photo courtesy of ieatmascar2Yesterday, I had to sit down with a client that I've been working with for the past four months to help her and her family buy their first home, and give her some bad news. In the beginning, I sat them down, did all the speeches and gave them the stories of past clients, but once again, they seemed to have missed the stories and now I have to sit and watch the tears roll down her face.

You see, this is the part of my job that I hate, telling a person that they have to unpack all their boxes that they had loaded in the truck for their pending move. This is when the tears start to roll down the face of the mother that has to tell her kids that the room they had just packed up, because they were told they were finally going to get their own room, has to unpack those boxes and stay put.

The kids got upset because they had slumber parties planned at the new home with their friends and now they have to call and say, "We aren't moving after all" and the party has been canceled. You have to explain to them that the $5,000 they put down as earnest money is now also gone because of the breach of contract.

You see one of the things I stress to people in our initial meeting with me and their mortgage broker, is that once you are pre-approved, I don't want you doing anything that has to do with money that you haven't asked us about first, especially if filling out a credit application is involved.

Well, yesterday I had to break it to a client that her house isn't going to close as she had planned and that was because when the credit company pulled her credit again they found that she bought a car last week on credit.  This has now caused her debt to income ratio to go way too high and her credit score to dropped to the point that now she couldn't get a loan on the house.

You see, I don't like to see anyone cry, and to be honest it brought a tear to my eye to have to sit on the couch with her and tell her that her family now was going to have to continuing renting this place that they hated... if the landlord hasn't already rented it to someone else. If he has, they are still going to have to move and that will lower their credit score even more to fill out applications for places to move in to.

So, please don't make me have to tell you news that is going to make you cry. Listen to your real estate professionals that you have hired to help you in your home purchase. We really are telling you what is best for you and that you shouldn't buy anything large, and nothing on credit, until your home has funded and recorded with the county and you have moved in.



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Rainmaker
259,583
Melina Tomson
Tomson Burnham, llc Licensed in the State of Oregon - Salem, OR
Principal Broker/Owner, M.S.

I was representing a seller earlier this year and the buyer QUIT her job (She had a new one lined up) 4 DAYS before escrow.  HELLO...

People do the stupidest things.  Any chance she can rent the new house, while she sells the car and pays off the loan?

You are the lease option specialist!

Jun 24, 2008 07:37 AM #1
Rainmaker
1,167,066
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota Real Estate Expert

Ouch...bought a car last week. I have not had that happen to me yet. Thank God!

Jun 24, 2008 07:37 AM #2
Rainer
135,795
Michael Shankman
Award Realty - Las Vegas, NV
Selling Las Vegas 702-498-3383

good post..sorry about all of this..I always tell my buyers-don't buy or do anything until the house has closed..

Jun 24, 2008 07:39 AM #3
Rainer
2,840
Paul Morley
Coldwell Banker Triad Realtors - High Point, NC

Good reminder, thanks.

Jun 24, 2008 07:40 AM #4
Rainer
64,171
Amy Salisbury
Leading Edge Properties - Charles Town, WV
West Virginia Realtor/Jefferson/Berkeley

Todd,

Why oh why won't clients listen???  Then you can't help but feel like the "bad guy" when you're the one who has to break the news that they're not going to close.  I've often said, being a realtor isn't just listing and selling houses, its also being a credit counselor, marriage counselor, etc...

Well, hopefully, they will get their finances back on track and be ready to buy in the future, with you!

Amy Salisbury

Jun 24, 2008 07:45 AM #5
Rainer
18,772
Andrew Hodge
Right At Home Realty Inc. - Richmond Hill, ON

wow, I haven't had anything like that happen to me yet, but it does boggle the mind a little at how people think that they can keep spending on credit without any consequences.

Jun 24, 2008 07:48 AM #6
Rainer
122,409
Jim Albano
Prudential Damiano Realty - Little Falls, NJ
Team - Jean-Marie Vantuno / Realtors North Jersey Real Estate

Their Mortgage Broker should have made this clear to them, especially if they were right on the border with their debt ratio. Either way, the situation really stinks. Too bad they had to learn the hard way.

Jun 24, 2008 07:49 AM #7
Ambassador
461,810
Terrie Leighton
Ferrari-Lund Real Estate - Reno, NV
Reno Real Estate Agent ~ Selling Homes in Reno

Todd - since you went over everything with the buyers in the beginning you really should not feel to bad (ouch)! It is really hard for some people to understand how  financing, mortgages, credit ratings, etc.  and all fit into buying a house! It is unfortunate, but I hear of similar stories like this a lot.

Jun 24, 2008 07:56 AM #9
Rainer
94,780
Kim Wood
The Tech Byte - West Chester, PA
Kim Wood ~ The Tech Byte

I always try to mention this - along with all the other hundred things you tell a Buyer - I'm going to send my current Buyers all a link to your article. It is well said, and I would hate to deliver the news as well !!!!

Jun 24, 2008 08:16 AM #10
Rainmaker
1,142,336
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Oh man!!!! I hate it when that happens. I feel for the buyers BUT they should have listened. Once you are approved the bank accounts and credit remain the same. No exceptions. Don't do ANYTHING financially without checking with your lender or REALTOR(R) first. I'm so sorry to hear about this Todd. I hope they got a nice car.

Jun 24, 2008 09:21 AM #11
Rainmaker
417,264
Debbie Malone
Londeree's Real Estate & Property Management - Lynchburg, VA
From Lynchburg To The Lake (434) 546-0369

Todd, what a shame! They should have taken your counsel to heart. I think Kim's got a great idea, I'll send buyers here as well. This is a great example of what not to do.

Jun 24, 2008 01:44 PM #12
Ambassador
2,137,194
Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate

Melina - I've tried it all, including buying it myself on owner financing and lease optioning or owner financing it to her directly, but the sellers need the proceeds to close on their new home.

Chuck - I've had it happen more times than I care to admit, but I keep telling people and they keep doing things like this!

Michael - So do I, but apparently they hear what they want to hear.

Jun 24, 2008 05:32 PM #13
Rainer
274,613
Adam Waldman
Westcott Group Real Estate Company - Hauppauge, NY
Realtor - Long Island

TODD - I've always warned people not to open up new lines of credit once they've applied for a mortgage.  I guess that they've listened, because I have no stories like this to tell (thankfully).  I feel badly for this woman, and especially for the kids.  The sad part is that this all could have been avoided if she just took your advice.

Jun 24, 2008 09:48 PM #14
Rainmaker
338,264
Paul Slaybaugh
Realty Executives - Scottsdale, AZ
Scottsdale, AZ Real Estate

That's brutal, Todd.  While the general public will feel no pity for you, as a fellow agent in the trenches, I extend my condolences to you and the listing agent as well for the lost sale.  Nothing like working for free because of a silly mistake.  Buyers and sellers aren't the only ones with children who depend on them.  Of course, the seller really takes it in the shorts here too.  At least they receive the earnest funds to cover damages, while you are simply left to shrug it off.  In this day and age, it is hard to fathom that someone could be be in a position to purchase a house, and not understand that certain short term sacrifices must be made.  Some people can be told at length, but will either ignore or simply not hear the advice.  In this age of entitlement (someone coined that in a post around here), such a borrower just assumes that everything will work out.  I'm sorry you have to be the messenger.

Jun 25, 2008 04:04 AM #15
Rainmaker
335,193
Leslie Prest
Leslie Prest, Prest Realty, Sales and Rentals in Payson, AZ - Payson, AZ
Owner, Assoc. Broker, Prest Realty, Payson,

We had the same thing happen once. People just don't listen.

Jun 25, 2008 07:02 AM #16
Rainmaker
2,190,577
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

One of my buyers emailed me last week to ask if they could buy a TV. They're scheduled to close on Friday. I told them NO, and if they already bought it, take it back and get the credit reversed immediately!!!! Thank goodness they hadn't. You never know what can trigger a problem at closing, so it's best to do nothing at all.

elizabeth weintraub sacramento real estate

Jun 25, 2008 07:39 AM #17
Rainer
66,957
Dionne Morgan
Realty World Solano Realty - Vallejo, CA
Broker REALTOR ,GRI, e-PRO

Why? Why didn't they listen.
I have had the client tap into the funds for the closing cost to buy  a car hoping the seller would make up the difference. What a painful lesson for the stubborn.

Jun 25, 2008 10:49 AM #18
Rainmaker
260,484
Mindy & Jay Robbins
Robbins Real Estate - Dallas, TX
Expect Excellence from Robbins Real Estate

I really understand your point.  We have been cried on for other related real estate issues.

Jun 26, 2008 11:09 AM #19
Rainmaker
142,685
Cristal Drake
Prudential California Realty - Fullerton, CA
Realtor - Fullerton Real Estate

Wow, this really stinks for everyone.  I use to be in the lending side and saw this happen so many times it was aweful. 

Jun 26, 2008 04:02 PM #20
Rainmaker
299,178
Kathy McGraw
CELLing Realty - White Water, CA
Riverside County CA Real Estate

Todd- Yep one of the worst part of our jo bs is to tell people that their behavior has consequences.  It would have been different if you hadn't tole them, but since you did it makes it even harder in my opinion.

We cna only hope that we have more on the other end.

Jun 28, 2008 01:53 PM #21
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