I'm Pre-Approved - What Can Go Wrong?

By
Real Estate Agent with Classic Realty Realtor

I'm Pre-Approved - What Can Go Wrong?

A recent client, while touring homes, asked me a simple question
:
"
What is the number 1 thing you've experienced that most often goes wrong in a Real Estate Transaction, after you have a contract?" While other Real Estate agents might come up with a different response, mine is a NO Brainer.

The clients have their pre-approval for a Mortgage, their credit is run again for one last time just before closing and a problem surfaces. The problem? The pre-approved clients have gone out and made some kind of a major purchase on credit. Most often, it is for furniture for the new house, flooring, window treatments and/or a host of other possibilities. As a result, their Credit Score has been affected and now, being able to secure a Mortgage is in serious jeopardy and/or the Mortgage Loan falls through. 

What is the rule here?
Once you have your pre-approval, 
just say, "NO" to the temptation of buying on credit or the unnecessary spending of cash!

Do not buy on credit before you close on the house. Do NOT spend unnecessary cash out of your various savings/checking accounts. This is especially true if your Credit Score is sitting right on the border of "Just making it" so as to secure a loan, or you have just enough cash to close. This is TRULY what is REAL about Real Estate. 


Finally, remember that knowledge can be power when endeavoring to buy or sell Real Estate. If I can help you in this process, please contact me by phone/text/email

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Re-Bloggged 1 time:

Re-Blogged By Re-Blogged At
  1. John McCormack 07/15/2012 09:29 PM
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Topic:
Home Buying
Location:
Virginia
Tags:
fairfax mls
haymarket mls
haymarket homes for sale
fairfax homes for sale
credit
preapproved

Comments 33 New Comment

Rainmaker
360,413
Kevin Mackessy
Dedicated. Qualified. Local.
Blue Olive Properties, LLC
Excellent advice. Just say no to the temptations.
July 16, 2012 03:39 PM
Rainer
214,386
Carie Shapiro
Managing Broker-IL; Pre-License Instructor-IL; Broker-TX

Good reminder!  No major purchases and no new credit cards either ... even though they offer you an additional 10% off your purchase :)

July 16, 2012 03:44 PM
Rainmaker
521,172
David Burrows
No Pressure, Just Seriously Devoted to Real Estate
Classic Realty

Thanks Jay for sharing your thoughts... A good educational course in home buying is always a good thing, espcially for first time home buyers.

Kevin, thanks for stopping by and reminding all Home Buyers to resist the temptation to spend.

Carie, you are right, say NO even if they offer some kind of rebate for taking the Credit Card. Thanks for coming by.

July 16, 2012 04:30 PM
Rainmaker
537,977
Eric Michael
Metro Detroit Real Estate Professional 734.564.1519
Remerica Integrity, Realtors®, Northville, MI

David, I've actually been finding a LOT of loan officers aren't telling buyers about this lately. I was showing homes to a guy a few months back, and in our discussions he mentioned that he only had 1 payment left on his car. I told him "that's great, because it will free up some money". He responded, "The day the check clears, I'm going to buy a New car!" We had a long talk right then.

July 16, 2012 04:31 PM
Rainer
8,017
Jay Taylor
Cre8tive Apps, LLC
I am a bit surprised that stuff like this happens. When I was buying my home and was pre approved, I would not have even considered such a move. My entire focus was on getting the right house and not doing anything that would create risk. Once in the home , then yes buying a new washer and dryer and refrig were on the list, but not until after keys were in hand.
July 16, 2012 10:07 PM
Rainmaker
521,172

David Burrows

No Pressure, Just Seriously Devoted to Real Estate
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Additional Information

This blog is written for Buyers and Sellers about the subject of Real Estate. The information is presented in a simple and informative format so that whenever readers have a Real Estate transaction, they will feel more adequately prepared.