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“Almost” Home Buyers – Restrain Yourself!

May 17, 2010 By Doug Francis

BMW Logo in Düsseldorf Hellerhof: Hans Branden...

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“This isn’t the right time to buy his and her BMW’s.”

My Northern Virginia real estate clients have heard me deliver that line for almost two decades when we discuss putting together an offer to buy a home. It’s meant to be funny, but also a very serious warning.

Real estate sales contracts will outline the type of mortgage financing that the buyer is going to obtain to buy the house. Based on that information, a home seller will agree to accept the offer making it a ratified or binding contract. Still following?

  • No new lines of credit
  • Don’t change jobs
  • Don’t move balances on your credit cards
  • It’s all about the ratios and documentation

The Realtor sales contract used in Northern Virginia real estate sales specifically outlines that the home buyer will comply with the mortgage lender’s requests in a “timely and diligent manor”. But it also outlines that failure to comply with the lender requests or committing an act that prohibits them from obtaining the specified financing may result in DEFAULT.

NVAR Regional Real Estate Sales Contract ¶26: DEFAULT

The Washington Post Saturday Real Estate Section (May 15, 2010) had an article about mortgage lenders reviewing credit reports an extra time, just before closing, to make sure the buyers haven’t impacted their financial status with other new lines of credit. (Credit Reporting Agencies can also send “alerts” to the mortgage lender of any changes) For example, if they see that you now have a credit line at McLean Furniture for $10,000 that wasn’t on you first report, well then you’ve got some ’splainin’ to do.

This extra scrutiny may just blow your deal, cost you the Earnest Money deposit and open you up to pay extra damages to the seller for breach of contract (please include attorney’s fees).

This new “second credit report” at the last minute program began June 1, 2010, but lenders have typically re-verified employment just before closing. Rhonda Porter called this a new “Speed Bump Prior to Funding Your Mortgage” which is sure to cause some headaches.

So, here is my professional recommendation: once you are involved in a real estate contract restrain yourself and do not make any new credit applications… you are on thin ice!

Let me warn you, your mortgage lender will recheck everything just before settlement

Again, this isn’t the right time for new BMW’s!

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Filed Under: Blog, Home Buyer Tips Tagged With: buyer agent, home buyer, real estate, Vienna Virginia

About Doug Francis

A Realtor specializing in unique and new homes around Vienna, Virginia, Doug started writing a first-hand blog about his everyday real estate experiences a decade ago. In-depth, helpful and fun has always been the objective. Outside real estate, he was profiled in a commercial for Verisign's "Where the World Clicks" global ad campaign, and was quoted in Money Magazine's Best Places to Live article on Vienna (#3!). He's a Boston University graduate who feels morning coffee is non-negotiable.

Vienna real estate agent Doug Francis

I’m so excited that you found me! Yes, this site covers real estate, but also a lot about lifestyle and  living in Vienna, Virginia outside Washington, D.C.

There is a lot of info here, and you can also contact me with any specific real estate questions. And, at home consultations are available too.

My background… I’ve been an active licensed agent in Virginia for 25 years, work at TTR Sotheby’s International Realty in McLean, and sell homes in all price ranges. I donate to the Town of Vienna tree replacement fund, participate in a neighborhood citizens association, and try my best to stay in shape.

Let me help you: Email doug@dougfrancis.com or call me at (703) 304-6827 to discuss your plans. Cheers!

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About Doug Francis

I am a Realtor with TTR Sotheby's International Realty® just outside Washington D.C. in Northern Virginia. I have been a full-time Realtor licensed in Virginia since 1991, and cover a big territory specializing in the Vienna real estate market and custom homes for sale.

I have unique knowledge of digital real estate marketing, and my marketing starts here. My clients have been attracted to my results-oriented strategy for years, and I am accepting new clients for 2023 right now.

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