Wednesday, 2nd of April 2008 at 11:53:13 AMOver the past couple of weeks I’ve received the normal set of calls that you get when the market is showing signs of recovery. How much is my house worth? Are there any good deals out there? Would you buy an investment today? But the one that was strange was from a family friend. This is a man that has struggled throughout much of his life and has been trying hard to clean up his credit to purchase is first home. I admire his dedication to his family and the lengths that he goes through to provide for them, but this conversation was odd. He stopped by the house to see me and talk to me about looking for a house to buy for his family. A conversation that I’ve had many times and will have several more times. We talked about what he was interested in, where he wanted to live, where he worked, the schools for the kids even the budget that he wants to spend.
Then there it was, A buddy of mine at work says we should find the house that I want, then go to the bank and negotiate that they fund it. What? Come again? How does that help? He proceeds to explain to me that his buddy says that if we find the house, it is easier to get the bank to loan more money than they would normally.
From there we start talking about cash flow, income to debt ratios and how the banks/mortgage industry does some of the basic part of the application. I explain that often banks will provide more lending than a consumer can really handle, it’s up to the consumer to say how much they really want to pay each month to own a home. That is the best way to set a price on a home, not how much the bank/mortgage company will lend you (read this is how many consumers got into trouble recently). I gave him some “let’s pretend” cases and other things to think about. Gave him the cards to some lenders that I work with in the Northwest valley (where he wants to live) and a card to give his buddy to call me if he has any questions.
This just reminds me that part of our job as Realtors is to provide information to our clients that help them make good life decisions. Provide them guidance. I lose enough sleep worrying about the fact that buyers I helped last year have lost equity in their homes, my only solace is the fact that I know that they can handle the home beyond the recovery period. That the loans they are in, are good ones for their individual situations.
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