Media Over Exaggeration

Last week the New York Times printed an article on the front page of the Real Estate section titled “For Buyers, Many Roadblocks” which basically discussed how tough mortgages can be to get these days. Having read the article on Saturday, thanks to home delivery, I was well prepared for Sunday’s open house rush of questions.

I usually spend my Sunday’s at an open house or two, to assist with traffic low and any questions potential buyers may have. In my 27 year career I have never seen such a disparity between what the buying public perceived as reality, and what is really happening out there.  Most of the buyers seemed to be focused on their in-ability to get financing rather than focusing on falling in love with the property.   It seemed that the NY Times article unnecessarily  heightened people’s fears  about their personal finances.   Most of  them really had so little confidence in mortgage-ability that that even if they DID love the property, this skeptical attitude could possibly prevent them from making an offer.

 Here are the situations I ran into.  Please note that ALL of their fears were unfounded and based on media over exaggerations:

 Scenario #1

 A couple looking to upgrade their condominium were skeptical on their ability to get a mortgage. She had just started a new job last month and had student loan debt she had been carrying. He was in a steady job earning a 6-figure salary for 3 years. A portion of their down payment was coming from a gift from their parents; the rest was coming from the sale of their cooperative. .

 They had read the article and were quite dismayed when they read about a 5 year history required at their job to qualify, or needing to have no debt to get the best rate.

 I explained that although she started her new job last month she had a 4 year verifiable history in her field. The student loan she carried was fine because their combined income was more than enough to offset any payments they were making. They were thrilled to learn that they were qualified.

 Scenario #2

 A young couple was looking to purchase their first apartment. This was their first day shopping and they had seen approximately 10 properties. The last open house they attended was where we met. They, too, had read the article and were convinced they would need to wait 3-4 months before they could afford to get any type of financing.  The only reason they were shopping was to get an idea of what was available on the market so they would be confident when the time came to buy.  They fell in love with this last apartment but were very disappointed because “it was out of their price range and they couldn’t afford the apartment”. I stepped in and suggested that we review their finances to determine if they could possibly afford to purchase the apartment. To their astonishment they were over qualified for the purchase and put in an offer on the spot. Within an hour they had an accepted offer and were excited at the notion that they were able to buy such a wonderful apartment despite what the article had dictated to them earlier that day.

Had I not been there to explain how qualified they were, the realtor would be hosting another open house this weekend at the same apartment

 While there are difficulties with certain transactions, most buyers are not clear on what can or cannot keep them from qualifying for a mortgage. The media is constantly playing down the availability of financing to well qualified buyers, which puts doubt into their minds. It is VERY important to make sure any and all of your potential buyers are well aware of the availability of financing. I am available to attend any open house or answer any questions for buyers who feel they are not adequate for financing. While some borrowers may not qualify, the majority certainly will.