Part of the Job: NOT making the sale
I cancelled an escrow today. Part of me feels some pain because a successful close of escrow is how I earn my living, and this one is now gone. Part of me feels good because I helped guide my clients to the right decision, which was helping them – ultimately – understand that they weren’t ready to buy what they really wanted. Our Agency relationship requires me to look out for their best interest, which is really the most important part of our job. This is an example of what Agency is all about. I allowed them to come to this conclusion when I knew they were ready to grasp it.
This borrower was married but the spouse could not contribute to the purchase because of a prior short sale attempt that turned into a foreclosure on an investment with another family member within the last year. The spouse doing the purchasing in this case has stellar credit and a well paying steady job/career, but this newly married couple could only use the one spouse’s financials.
There was a pre-approval. They learned that they were not competitive with only 10% down in the price range they could afford with just the one qualified borrower. After a few lost offers, I strongly recommended that they speak with a financial planner to assess their overall financial picture and goals. They agreed and now have a bigger picture plan in place. They will hunker-down, continue to save money for the needed 20% or higher downpayment so that several months or maybe even a year down the road they can get into a property that will ultimately make them happier.
They still want to get the property alerts so they can watch the market until the right time. No more property viewings for now! In a strange way, this is kind of good pain.
If you plan on borrowing in this lending environment, it’s a good idea to be a “strong” borrower. We use the term “strong” to describe a borrower who is well qualified: good FICO score, good debt-to-income (DTI) ratio, and a sufficient downpayment saved up for the purchase, which will provide an adequate loan-to-value (LTV) ratio on the property you want to purchase.