What First Time Buyers Need to Know . . . Why a Car Loan is NOT The Same as a Home Loan

By
Real Estate Broker Owner with BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time Licensed State of Oregon
http://actvra.in/HjP

Lenn Harley has epiphanies.  When she does, she shares them with us and they're really good!!

I had one the other day (Saturday, to be exact) when I received a call from a first time buyer.  While talking to the nice young man something weird happened. 

I said, "You know, getting a car loan is the EXACT OPPOSITE of getting a home loan."

And I explained:

  • A car buyer goes in to the lot.  They test drive the vehicle, like it and then they apply for a loan.  The mantra of "What can I do to get you in this car today?" is often heard. 

When buying a car, the financing is done AFTER the decision is made to buy the car.  And boy howdy, they'll find a loan for the car buyer.  No credit, low credit, crappy credit . . . NO PROBLEM!  They'll be able to finance a car loan.

NOT SO WITH HOME BUYING!

  • A home buyer goes in to the house.  They check it out, like it and then . . . if they make an offer based on the "car buying" mentality of applying for a loan AFTER they've found a home, they might not be able to close the deal.

Why?

Financing guidelines.  Plain and simple. 

  • Buyers might be looking at property they are unable to qualify for
  • The home buyers income-to-debt ratios are too close and they need to come up with more down payment in order to purchase . . . which they may not have
  • The buyer CAN qualify, but opps, someone with a pre-approval submitted an offer and the seller opted to go with the buyer who was pre-approved
  • The seller doesn't want to accept an offer which isn't backed up with the Buyer's pre-approval
  • and the other reasons buyers can get turned down for a home loan are vast and varied

It was an epiphany . . . or something like that.

If you're buying a home GET YOUR FINANCING IN PLACE BEFORE YOU GO OUT AND KICK THE TIRES!

The seller is NOT OFFERING FINANCING.  They won't be able to get you in the home today . . . unless you show them your pre-approval with your offer!

Posted by

Buyer Focused ~ Buyer Results

 

Representing Buyers in the Portland Metro Real Estate Market | Clackamas Multnomah and Washington Counties | Since 1999

Carla Muss-Jacobs, REALTOR®, ABR, CEBA, ePro
Principal Broker/Owner

Direct: 503-810-7192 | BuyersAgentPortland.com | Carla@BuyersAgentPortland.com

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  1. Ed Silva 09/07/2012 06:51 AM
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Topic:
Home Buying
Location:
Oregon Washington County
Groups:
Realtors®
Bartender, Make it a Double
"Whacked"!!!
Dedicated Bloggers
BananaTude
Tags:
obtaining a home loan
obtaining a car loan
first time buyers

Comments 41 New Comment

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Ambassador
597,588
Doug Rogers
Your Pineville Louisiana Agent
Bayou Properties Realty

I have a couple of hard working mortgage brokers that will field my sign calls on the weekend. Buyers NOT willing to speak with these professionals (or supply a loan letter) don't get in the front door.

September 07, 2012 06:53 AM
Ambassador
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Renée Burrows
Las Vegas Real Estate Broker - www.urLVhome.com
Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate

It's all fun and games until you can't buy the home of your dreams :)

September 07, 2012 04:16 PM
Rainmaker
203,307
Paige Walker
Real Estate Guru - Alexandria Pineville LA
Louisiana Lagniappe Realty, LLC

Yeah Carla!! That is so very true and I love the analogy.....Great Post!!

September 19, 2012 09:06 PM
Rainmaker
529,328
Ginger Harper
Your Southport~Oak Island Agent!
Coldwell Banker Sea Coast Advantage

A lot of difference...and we are not used car salesmen either

 

September 20, 2012 08:09 AM
Anonymous #42
Anonymous
Anonymous

Such a simple concept, and you communicated the comparison perfectly.

May 17, 2013 03:34 AM
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Carla Muss-Jacobs, Principal Broker/Owner

Buyer Focused ~ Buyer Results
Planning to Buy a Home? Let's Chat . . .
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Additional Information

Author Bio: Carla Muss-Jacobs is the Principal Broker/Owner of Buyers Agent Portland, LLC an Exclusive Buyer Agency representing Buyers in the Portland Metro real estate market since 1999.

The Sellers have their own agent ~~ Why don't you have yours?  

Carla Muss-Jacobs practices the TRUE FORM of Buyer Agency ~~ Exclusive Buyer Agent.  Her office/brokerage never takes listings and never respresents the Seller.  Exclusive Buyer Agency is the BEST form of legal real estate representation a Buyer can have.  There is 100% Buyer Representation - !00% of the Time.  There are NO CONFLICTS OF INTEREST and there is no possibility of ever having YOUR Buyer Agency comprised.  When buying a house -- it's important to know who is working for you!!