This REALTOR Welcomes Helicopter Parents!

“I was accused of being a helicopter parent.”  This statement was recently made by a friend of mine while we were chatting at a local coffee shop about our adult children.

My response to her was, “Really? Did you say thank you?”

Being a helicopter parent doesn’t always have to be a bad thing. It means you care about your children enough to give them advice rather than let them go off on their own and make mistakes. Okay, it’s not a good thing to ride with them on the school bus, follow them into the classroom and do their homework. But a mom going to check out colleges with her daughter or a dad going to the car dealer with his son isn’t such a bad thing is it? 

As a REALTOR®, I come across helicopter parents all the time. Buying a first home can be an exciting, but also a somewhat scary, experience. It is the first big purchase most young people make. One that will have lasting effects on their live if they make a huge mistake. I am not surprised when my young buyers say that their parents want to see the house or attend a showing. In fact, I welcome moms and dads to attend showings or a meeting where we write up a purchase agreement. Usually after a few minutes of questioning by a concerned parent, they realize I am not just out to sell a house as quickly as possible. What I want as a buyer’s agent is the same thing that any parent would want for their child. I want my client, their child, to be happy with their home purchase. When someone signs a buyer’s contract for representation with me, I have fiduciary duties to put their needs first. I work in the best interest of my client at all times. This means full disclosure on the condition of the home, pointing out things to ask the sellers or an inspector about as well as preparing the paperwork noting contingencies that will protect the buyer if everything is not as it seems.

I have received almost as many thank you notes and emails from parents after successful closings as I have from my home buyers.   After all, we had the same goal, for the new home owners to be happy with their first home.

Copyright 2014 www.terieckholm.com

Couch Ouch—Resist the Urge to Splurge!

Buying a first home is an exciting time. There are so many things that have to be arranged and purchased besides the home like home owners insurance, utilities, cable, internet, moving truck rentals and furniture. There is one common theme in all of these arrangements, money. Everything is going to cost something and quite possibly, require a look at your credit.

But this should be no big deal, right? You found the home, wrote the offer, it has been excepted  and were pre-approved for the purchase, so now you are good to go. You don’t have to worry about that silly credit score or credit ratio the loan officer had you so uptight about anymore, right? WRONG!

Many first time home buyers forget that as a stipulation for the loan, a credit report can be pulled right up to closing to make sure there are no new debts. This means,don’t open any new lines of credit or you could find yourself without a home.

Recently, a young client of mine had to sweat out the last few days before closing due to the purchase of a couch. He was excited about his first home and really didn’t have a couch to sit on….and there was a HUGE sale at a local furniture store. 

Had he used the credit card he already had in his wallet, there wouldn’t have been an issue. But the salesperson at the furniture store encouraged him to "get a better deal" with a new store card. But furniture salespeople do not know whether or not this great little card will affect your credit score...they just get a bonus every time someone signs up. That "deal" came with a new line of credit that could have cost my buyer the house. Fortunately, he didn’t have Cadillac tastes and his furniture purchase and the accompanying line of credit was somewhat reasonable. 

But the story didn't end there. Upon realizing his mistake of opening a card before his home closing,  my buyer tried to “fix” the situation by transferring the charge from the new furniture card to his existing credit card account. This actually makes things worse. FICO scores can be affected negatively when a credit card is used to pay off another card.

About a week before closing, I received a text from my client about this little “couch ouch”. He was completing the paperwork for final approval and there was “the” question, “Have you opened any new lines of credit?” He wanted to know how to answer it and told me about the new couch (and credit card that it came with). Now, he was wondering if he should borrow money from his parents to pay off the card or return the couch. What was going to fix the situation and still allow him to purchase the home?

 

Okay, I’m not a loan officer but Ido know there has to be a paper trail for any funds coming into accounts right before a closing too. They will pull the bank statement and every big deposit will need to be explained. Plus it will not negate the new line of credit. I told him, “Call your loan officer asap!”

The good news for my client was his mistake was small price-wise and didn’t prevent his home purchase. Had he obtained credit for new appliances, hardwood floors or a car, there might have been a different outcome. However, the situation did cause him some needless worry a few days before the closing. Sharing the story is a good lesson for others. Remember per-approval isn’t the same as final approval on a loan. Your credit and income will remain under the scrutiny of the underwriter until closing.

My mother always told me, there  is always another sale. So be patient and resist the urge to splurge on a new couch, carpeting or appliances before you sign the final papers on the purchase of your home.

IMPORTANT REMINDERS

• Don’t take out new lines of credit. If they ask for your social security number it will most likely cause a tick on your report.
• Be prepared to explain any large influx of cash into your bank account, if you receive a gift or unexpected payment of any kind.
• Don’t quit your job or reduce your hours. Your income will be verified right before the closing.
• When in doubt, call your loan officer. They would rather answer a call now than give you news later than you no longer qualify for the loan.
• There will ALWAYS be another sale. Try to shop after your closing not before! 

Copyright 2013 www.terieckholm.com