This is the story of a buyer who did everything right and in the end it didn’t matter. Buying a house these days can be a process that takes all sorts of twists and turns. Real estate agents can guide a buyer through the process and can explain all of the pitfalls, can explain the pro’s and con’s of issues as they come up and then something can happen that was not foreseen. That is the thing about selling residential real estate that no matter how long you do it things still come up that have never happened before. This is what happened.
My buyer went to the bank and obtained a pre approval. His credit score was obtained. He was given an amount that he was approved for monthly that he could not go over. This number included the mortgage, taxes and insurance. This is the most important first step that a buyer can take so that they know what they can afford.
My buyer then looked at about 30 houses over a period of several weeks and narrowed down the 30 to 3 that he liked.
My buyer obtained the flood insurance quote, got a hazard insurance quote, we figured out the taxes and we knew the monthly mortgage amount. So he placed an offer on the property with confidence armed with all of the numbers he needs to insure that he is within his approved amount. The offer is accepted, a home inspection is done and we are in the inspection period. Everything is fine with the buyer being happy and loving the house.
Now comes the problem. My buyer had no way of knowing this however the house he was buying has a cement asbestos roof. He called his insurance company to firm up the insurance costs and finds out that because the removal and replacement of this type of roof is costly it bumped up the insurance estimate that had been used considerably and knocked the monthly amount above what he was approved for. In this case the amount this buyer was paying for the house had been negotiated up just enough that coupled with the increase of the insurance because of the roofing material this buyer now had too high of a monthly amount and would not have gotten his mortgage. If the seller had accepted a slightly lower amount this transaction could have moved forward but the seller was unwilling.
Many calls were made and insurance agents many of whom thought they had ways around this however the bank would not accept any of these ideas. My buyer had to back out of the purchase after a lot of time, effort and emotion had gone into the process.
So, sometimes you can do everything right and it still isn’t enough. That’s just the way real estate is sometimes.