How not to buy a home

There are a few dos and don’ts when you start down the road of buying a home.

Over the last month and a half, I have been working with a great family relocating from northern B.C. to the Okanagan. Their mortgage journey has been hands-down the most stressful one I have ever worked on.

I’m going to share their story to, I hope, save you (or someone you know) the expense of sleepless nights and ulcer medication.

First, a bit of context.

A few years ago, a broker friend shared some of her handouts with me. One of the pieces was titled something along the lines of The Ten Mortgage Commandments.

I had seen these points in similar handouts a few times, and initially thought my clients might feel offended by the tone of the message. Then, with more experience, I realized why a mortgage broker somewhere along the lines put the information together.

I wrote a column about this almost exactly three years ago and then revisited it two years ago, so if you are in the process of buying a home you may want to have a quick look.

Back to this family.

They had been in limbo for almost two years waiting for their home to sell. They finally had an offer and were excited to move on with their lives. They had been maintaining two households — the move was an amazing work opportunity for her in Vernon.

Once the offer on their home came in, they connected with a broker they knew. He did an application and gave them a maximum price point to look at.

They went shopping and were excited to find a beautiful home just under this price cap.

They wrote an offer and waited expectantly for their approval.

Two days before their subject removal date, their broker told them there was no way to get an approval unless they came up with a significant amount more as their ratios were too high.

The realtor they were working with on the purchase called me and asked if there was anything I could do to save the home for them. I said I would see if there were any options available for them.

I did find a mortgage product that would work and worked quickly to get them an approval. They were able to get a two-day extension on their subject removal date.

The particular lender we had to go to does not work particularly quickly, so although we had an approval prior to subject removal, there were still conditions outstanding that needed to be confirmed by their lender.

The sellers were not willing to grant another extension to the subject removal date. They were understandably concerned that my buyers might not actually get financing in place and they would have then had their home tied up for almost a month and missed out on other potential buyers.

On subject removal date I had a long – and I do mean long – conversation with my clients about the implications of removing the financing subject without all the conditions being signed off.

We went over the conditions one by one. I needed to know they clearly understood what still needed to be finalized. I was very clear that they needed to stay status quo with their employers as the approval was based on both of their incomes.

No spending any of the money they had tucked away.

At this point, they were emotionally invested in this home as it checked all of their boxes and it had been a very two long years of waiting to get to this point.

His comment to me was “we’re going to roll the dice and see what happens.”

They signed off and made their offer to purchase firm. No backing out now without the risk of losing their deposit and potentially being sued. Closing date was three weeks away.

I followed up the next week to get a copy of his first pay stub once he was back to work (seasonal work that was gearing back up for the winter). I asked when I could expect it. He said “never.”

He said he didn’t quit, but wasn’t going back to work. He had interviewed for a better job in Vernon, which paid considerably more so it made sense to them to jump on and him move to Vernon sooner rather than later.

The new company made a verbal offer, which in his mind was good enough. The HR person then went away for a week. The week turned into two as the HR person lost one of her parents and needed time to be with family.

The clock was ticking and now we had no old job and no new job.

These purchasers were extremely fortunate to be working with exceptional realtors on both sides. The sellers agreed to extend closing for two weeks to allow my clients to get their ducks in a row. 

The new employment letter finally came five business days before the new closing.

For two final, added twists: when they set the new closing date my clients didn’t realize that the husband would be sent out of town for work with his new job. He needed to co-ordinate signing legal documents in another community at month end, which is a busy time for lawyers and notaries involved in real estate.

He also had to make arrangements to wire transfer their down payment from a small northern credit union to their lawyer. That week, the credit union had transitioned to a new phone system and he could not get through to anyone due to a glitch in the system.

I am pleased to say that their mortgage did fund in time to close on their revised closing date.

This is not the ideal home-buying experience. A great deal of stress for all could have been avoided had they read and followed the Ten Mortgage Commandments.

So I get it. I get how this list evolved, and am now sharing it with all my clients.

They will be celebrating Thanksgiving in their new home. I’m grateful that everything lined up for them.

From my home to yours, wishing you a wonderful Thanksgiving.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.