Saturday, September 19, 2009

Dustin & Denise DeLusionalz
These buyers stumble upon an Open House sign one bright and sunny Sunday afternoon. The home looks lovely, and they can’t resist. They tell the agent they’ve always wanted to buy a home in the area, and this particular home met every need including price. The only thing standing in their way is selling their current home. They write an offer, with a contingency that they must sale their current home first. What they’ve failed to mention are the stack of Past Due mortgage statements sitting on their kitchen table.

Dustin & Denise aren’t as uncommon as you may think. First, I’d like to defend them. Not a full-fledged throaty defense…more like a little above a whisper. Okay, here it goes: Its human nature to want more. Having said that, human nature also has a way of being unrealistic. When the DeLusionalz made the offer, they were working more on emotion than reality. Sometimes a wing and a prayer or wishful thinking doesn’t work. The stack of past due mortgage statements are just the tip of the iceberg. By erroneously submitting an offer, the DeLusionalz have possibly tied up two to three other buyers and sellers in the transaction loop.

My Advice: Dustin & Denise, please stop. If you can’t make your current payments, why would a bank loan you more money for a more expensive home? Rescind the offer, forfeit any earnest money without a fight, and throw in a heartfelt apology (via your agent). Spend the next six months to a year making your mortgage payments on time to keep you current. Paying down and/or off other bills isn’t a bad idea either. One year may seem like a lifetime, but it’s a good route to take. The silver lining is the two of you will be in a much better position when you are actually able to purchase another home.

1 comment:

  1. This is one of the biggest mistakes that can lead to foreclosure in the future. It's not worth losing your house over bills you neglected to mention. The less debt you have the better. Thanks for reminding people of this pitfall.