Throughout Rookie Roosts Week, we'll be hearing from first-time homebuyers with tales both awesome and terrible (the terrible ones will compete in our horror stories contest for a chance to win a $2,500 home store gift card - standard contests rules apply). Got a first-time homebuying story? Hit us up at the tipline. Today's tale: beware the mortgage broker scorned.
I wanted to share a nightmare of a story when my wife and I were in the process of purchasing our first home in Los Angeles. We were in our mid-twenties, just married and excited to find a home to start our new life. We found a real estate agent and were working with her for about a month when she introduced us to her broker. We met with him once, went over some numbers we were at the time comfortable with. Weeks went on and we found a condo we loved and put an offer in but wasn’t accepted.
During this time, the economy took a dump and the show I was working on was coming to an end (I’m a tv editor). We got a little more realistic in the amount we wanted to spend because of these changing factors. Then one day we got a phone call saying that the owner has re-thought our offer on the condo and wanted to take it. Well ?. we turned it down knowing he must have been having a hard time to unload the place for the price he wanted. The next day we received the below email from the mortgage broker who I had only met 1 time months ago, when we crunched those starting numbers. You be the judge on the tone of this thing. It’s filled with bullying, pressure and even threats towards first time homebuyers.
We were furious, called our real estate agent, told her that her mortgage broker lost her clients who were almost a sure thing in buying with her. We actually ended up buying the aforementioned condo from the listing agent for an even better deal.
[...] I've removed the names of the agent/broker because I believe in integrity :)
Subject: Good Morning [homebuyers]
Date: Monday, February 9, 2009, 6:42 PM
Good Morning, I wanted to touch base with you two regarding a couple items of concern.
I understand that [real estate agent] was able to get an accepted offer at $500,000 with 12 months paid HOA dues on the three bedroom condo that the two of you really liked. I want to let you know that [real estate agent] had to really fight for that deal to get accepted?it's a great deal. Her and I had to put ourselves on the line and ensure the listing realtor, the builder/investor, and their in-house lender that you two were highly qualified and motivated buyers.
However, after further consideration, I understand you have decided not to proceed on that deal.
I went back and reviewed my notes on your loan file from our original meeting several months ago.
Originally we were looking at a purchase price in the $600K - $650K range with monthly mortgage payments between $2800 and $3200. With taxes and insurance, we assumed a total monthly debt load of approximately $3500 was going to be acceptable.
As we have worked through this process, I understand you have revised your purchase price down by approximately $100,000 and your payment down by several hundred. I now understand that you are considering a total monthly debt of $3,000 a month to be to high.
I understand that these numbers can seem somewhat daunting as a first-time home buyer. Additionally, its hard for first-time home buyers to conceptualize the tax saving benefit and the true cost of ownership (due to what becomes several hundred dollars a month of tax savings). This is the reason [real estate agent] and myself have been readily available to help you work through these numbers and fight to get you the best deal possible.
However, after yesterdays set-back, I need to know that you two are serious with going forward on a deal? I can't speak for [real estate agent]; however, I make it a point to only stay late in the evenings and come in on weekends for clients who are very serious about moving forward with a deal.
We have to realize that there will always be something that scares us away from making large purchases. Bad news in the economy, potential changes in employment, changes in family, changes in your stock portfolio, ect, they are all reasons to get spooked about buying a home. However, the tax savings a house provides, in addition to pride of ownership and building equity opposed to throwing away money on rent? this should be enough to make us feel confident about home-ownership.
Additionally, even with thousands of realtors and lenders in California, this business is much smaller and tight-knit than you would think. When [real estate agent] and I bring a deal to another realtor, that realtor needs to know that we are acting in good faith. If we have to consistently back out of deals and cancel on transactions, it hurts professional image.
Please let me know how I can be of assistance to help us get over this hurdle and get you into a great place.
· Why You Shouldn't Work With Family When Buying a House [Curbed LA]