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Author: san6279 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308659  
Subject: disbelief Date: 6/12/2001 12:09 AM
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Hi all,

Just a little amusing story I wanted to share. I posted a while back about our happy dance. No more credit card debt. Anyway, my wife and I are just starting to think about the possibility of maybe, just maybe buying a house in the next couple years. So we are having fun once in a while by looking at houses and condos in the area. Last weekend, just by chance, we were talking to a lender at a condo complex. She wanted to give us an idea of how much money we could borrow. One of her information-gathering questions was "What is your total credit card debt?" When I replied "Zero", I'm pretty sure she didn't think we understood the question because she asked again about any credit cards over a balance of $500. I said, "Nope, no credit card debt". At that point, she looked at us like we were from another country or something...but I had a smile from ear to ear. Not sure if she even believed us. And although my wife has been giving me a hard time for paying off the debt so quick, and not saving more, I think she finally understood...she was smiling too.

san6279
paying off credit card use each week online since...2001
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Author: suzntobin Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75738 of 308659
Subject: Re: disbelief Date: 6/12/2001 12:34 AM
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Bet that felt great! Wonder how much debt she has that she was so unbelieving.


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Author: eslovick Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75740 of 308659
Subject: Re: disbelief Date: 6/12/2001 12:39 AM
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san6279,

What a cool story. That is great.
I got one of those lifts recently when Discover called, wanting to do one of those balance transfers on the phone. I told them that I had no credit card debt. So they said that they could do gas cards, department store cards, etc. I informed them again that I had no credit card debt. The lady on the other end of the line was silent for a couple of seconds, then she said, "well good for you!", and I really felt that she meant it.
Congratulations!!

Beth
(thinking about starting a real emergency fund since 1902)

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Author: gwagle Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75747 of 308659
Subject: Re: disbelief Date: 6/12/2001 1:28 AM
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<< I informed them again that I had no credit card debt. The lady on the other end of the line was silent for a couple of seconds, then she said, "well good for you!", and I really felt that she meant it.>>

My favorite response when I get calls offering me cash advances, equity loans, etc. is "thanks, but I don't need any more money." There is no scripted response to that.

Greta


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Author: krisgray One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75753 of 308659
Subject: Re: disbelief Date: 6/12/2001 7:52 AM
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Haha...!!!

I had a similar conversation years ago with the insurance company of the person who totalled my *less than one year old vehicle*.

"who has the title", she asked?

"I do", I replied.

She then went on to explain to me (in very simplistic language, because I was obviously too stupid to understand what she meant) that when you buy a vehicle, you theoretically "own" the vehicle, but someone like a "bank" or a "dealership" actually holds the title until it is paid for.

I waited for her to finish then said, "yes but I paid for it in full with cash and have the title ...right here in my hand".

Moments of dead silence while she tried to figure that out. Then just "oh".

Feels GREAT!!!

Kris

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Author: aja91 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75760 of 308659
Subject: Re: disbelief Date: 6/12/2001 8:57 AM
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Just a little amusing story I wanted to share. I posted a while back about our happy dance. No more credit card debt. Anyway, my wife and I are just starting to think about the possibility of maybe, just maybe buying a house in the next couple years. So we are having fun once in a while by looking at houses and condos in the area. Last weekend, just by chance, we were talking to a lender at a condo complex. She wanted to give us an idea of how much money we could borrow. One of her information-gathering questions was "What is your total credit card debt?" When I replied "Zero", I'm pretty sure she didn't think we understood the question because she asked again about any credit cards over a balance of $500. I said, "Nope, no credit card debt". At that point, she looked at us like we were from another country or something ...but I had a smile from ear to ear. Not sure if she even believed us. And although my wife has been giving me a hard time for paying off the debt so quick, and not saving more, I think she finally understood...she was smiling too.

I had that problem too. No credit card debt, no student loans, one income, two kids, one car loan completely current on payments, another completely paid off, some money in the bank, not yet 30. . . I think he thought we must be in some kind of shady business venture or something!

That was the second funniest occurrence. The funniest was the first house about four years ago. Recently married. Banker read over our financial info, which while not bad wasn't quite what it is now (small CC debt, two car payments). Told us that at current rates he was preapproviing us for a $200,000 mortgage. We said, "Make it $120,000." Guy's jaw hit the floor. Why? He couldn't believe we wouldn't buy the biggest house "we could afford." He didn't know that we planned to turn into a one income, with kids household in a few years. So we'd figured out what we could "afford", on our own terms, on that one income. We wanted breathing room to get the credit cards and at least one car paid off quickly as well. A $200,000 mortgage just didn't fit into our plans, even if somebody said we could "afford" it.

That decision was one of the smartest financial moves we made. Income went up faster than expected, debt got paid off, retirement accounts got built up nicely, all because we avoided the temptation to buy what we could "afford."

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Author: foolishinTX Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75777 of 308659
Subject: Re: disbelief Date: 6/12/2001 10:55 AM
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We did the same thing 5 years ago when we bought our house. Daycare expense isn't figured into the debt:income ratio and the lender (and realtor, at first) kept trying to push us to a higher loan amount.

I finally sat down with my realtor (who is now a wonderful friend and lives around the corner) and told her, "We KNOW how much we can and can't afford for a house. $XX,XXX is the highest I will pay for a house. I will NOT put myself in a position of losing it in a few years, because I can't pay the mortgage. If you can't find me a house in this range, I'll find someone else". She said that, at that moment, I had earned her utmost respect. Two days later, she found our house in her nieghborhood.

Now, I wish we had applied that same philosophy to the credit cards!

foolishinTX
Living and Learning every day since 1902.

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Author: j9drost Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75779 of 308659
Subject: Re: disbelief Date: 6/12/2001 11:09 AM
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I finally sat down with my realtor (who is now a wonderful friend and lives around the corner) and told her, "We KNOW how much we can and can't afford for a house. $XX,XXX is the highest I will pay for a house. I will NOT put myself in a position of losing it in a few years, because I can't pay the mortgage. If you can't find me a house in this range, I'll find someone else". She said that, at that moment, I had earned her utmost respect. Two days later, she found our house in her nieghborhood.

I hope that 10 years from now, when I'm looking for a house, I will remember this post and hope that I can be half as forthcoming with a realtor. I wish that I could have your confidence when it comes to dealing with people who are in supposed positions of power. Perhaps by then, I'll learn. Thanks for the lesson! ;)

Congrats!

-j9

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Author: buckzimmer Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75785 of 308659
Subject: Re: disbelief Date: 6/12/2001 11:51 AM
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You mean she didn't shoo you out the door and say, "Come back when you get a decent FICO rating, you bum"?

;)

Fred

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Author: foolishinTX Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75786 of 308659
Subject: Re: disbelief Date: 6/12/2001 11:54 AM
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The realtor is not in a position of power. They work for the seller (in this case for us!). They provide a service for which they are paid hansomly(sp?).

The loan officer IS in a position of power -- to turn you down for a loan. However, if they turn you down, because you are requesting LESS than what your are APPROVED for -- then they have set themselves up for big trouble. Also, they are also providing a service.

I tried to keep that in mind during my search. And trust me, my confidence is a facade. Inside, I was quaking when dealing with them.

Just keep this in mind.

Good credit + decent down payment = loan approval at a decent rate
If they try to jerk you around, remember they have competitors and you can leave.

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Author: ScrapinBy Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75787 of 308659
Subject: Re: disbelief Date: 6/12/2001 11:58 AM
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San,

You are the man. Great job on paying off those cards. As you already found out, it's much easier to buy a house with no debt.

Be really careful of those money lenders, especially the ones that work for the builder. There is a really good thread from yesterday from a couple who got taken pretty hard. My advice, since you are such a Foolish guy, is to go to a real bank and get your own loan. If you really want to see a puzzled look one someone's face, watch what happens when you tell this lady that you already have your own financing and now you want to buy the condo at a discount. She will be stunned and amazed. She definitely won't be happy about it.

Good luck with the house hunting.

Bret

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Author: ScrapinBy Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75793 of 308659
Subject: Re: disbelief Date: 6/12/2001 12:37 PM
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I finally sat down with my realtor (who is now a wonderful friend and lives around the corner) and told her, "We KNOW how much we can and can't afford for a house. $XX,XXX is the highest I will pay for a house.

Foolish,

Good for you. This will pay off long term after the cards are gone.

In case everyone hasn't already heard my story a million times, I had to walk away from two houses before I got the house I am in now. That is why I am pretty harsh on the lenders and agents. There is a big conflict of interest in this business, where the more they charge you the more they make. Needless to say, they usually don't have your best interests at heart.

The first house was owned by a real estate agent who got my deposit money then had the place appraised by his own appraiser for about $30,000 over market, then sent me to his loan guy who was going to "get me financed no matter what". Needless to say, the trap was set but I didn't take the bait. I lost $600 on the deal and considered myself lucky.

The second house also had a whacky agent that specialized in creative financing and distressed properties. She promised us the moon, then tried to stick us with a cr@p loan that could have indexed up to almost 13% a couple days before closing. Once again, we lost about $600 in deposits and had to bail out. This one really hurt, because we had to unpack all of our stuff from boxes and my wife totally lost faith in my ability to ever get us a house. We were feeling pretty low.

Finally, I decided to stop playing games with "creative financing" and do it right. I asked my boss for a 10K raise, so I could afford a house. (I was way underpaid and got the money.) I saved for two more years, doubled my down payment and paid down the debt. I found a house for sale by owner and I got my own loan from Home Savings and closed the deal myself. To say we got a great deal, would be a huge understatement.

My advice for anyone who is house hunting is to do your homework and don't let yourself get pushed into a bad deal by the "Professionals".

Bret

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Author: Calypseaus Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75834 of 308659
Subject: Re: disbelief Date: 6/12/2001 2:56 PM
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The funniest was the first house about four years ago. Recently married. Banker read over our financial info, which while not bad wasn't quite what it is now (small CC debt, two car payments). Told us that at current rates he was preapproviing us for a $200,000 mortgage. We said, "Make it $120,000." Guy's jaw hit the floor. Why? He couldn't believe we wouldn't buy the biggest house "we could afford." He didn't know that we planned to turn into a one income, with kids household in a few years. So we'd figured out what we could "afford", on our own terms, on that one income. We wanted breathing room to get the credit cards and at least one car paid off quickly as well. A $200,000 mortgage just didn't fit into our plans, even if somebody said we could "afford" it.

This is sooooooo familiar.
Last year when we were buying our house, my good and great friend, Francis, who's a realtor and mortgage broker of the best kind (really) offered to figure out "what we could afford" - we gave him all our financial information and about 3 days later he emailed me that he really didn't want us to look at anything more than $430k......we both stood there looking at the computer screen, stunned......we were anxiously waiting to see if he thought we would qualify for a $145,000.00 house....
I actually thought to myself "maybe Francis isn't as good as everyone says he is" but when we went through the same game with the broker at the development she said the same thing....then attempted to direct us to the "exclusive" part of the development......
We stuck with our "non-exclusive" house....and we love it! We just refinanced at 6.5% - and now we really LOVE IT and the payment!

Why marry a house? I don't get it.
Calypseaus


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Author: cable666 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75837 of 308659
Subject: Re: disbelief Date: 6/12/2001 3:09 PM
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The realtor is not in a position of power. They work for the seller (in this case for us!). They provide a service for which they are paid hansomly(sp?).

As a buyer don't ever forget this. No matter how many times your agent tells you they are looking out for you, what they are really doing is getting you to close escrow on the most expensive house you can qualify for. That is how they get paid.

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Author: buckzimmer Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75862 of 308659
Subject: Re: disbelief Date: 6/12/2001 4:49 PM
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<<No matter how many times your agent tells you they are looking out for you, what they are really doing is getting you to close escrow on the most expensive house you can qualify for. That is how they get paid. >>

That's how bad agents work for sure. But there are many good agents that are more interested in getting a deal close and get there by giving you the assistance you want. The key is the agent that you hire to help buy should NEVER be selling you.

Fred

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Author: Stockbuyer2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75912 of 308659
Subject: Re: disbelief Date: 6/12/2001 7:43 PM
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Why didn't you ask for your deposit back? Last fall we were selling our house and were 1 1/2 weeks away from closing when the people backed out. They asked for their deposit back and even though we didn't think that we should have to release it to them, after contacting 2 lawyers and reading what several real estate books said, we had no choice but to release it. The people hired a lawyer to write us a letter to get their deposit back. A real estate contract is not ironclad and is made to be broken according to one of the lawyers I consulted. Anyone can back out until the papers are signed AND GET THEIR DEPOSIT BACK.

Stockbuyer2

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Author: ScrapinBy Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75930 of 308659
Subject: Re: disbelief Date: 6/12/2001 8:50 PM
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Why didn't you ask for your deposit back?

Stockbuyer,

If this comment was directed to me, I would be happy to explain.

In the first deal, the RE agent was very slick and talked me into signing a rental agreement and giving him a rental deposit while we were waiting for the appraisal. I was pretty naive at the time and I just trusted the guy and gave him the money. We never went into escrow, because as soon as I got the appraisal and talked to his loan guy I knew I was set up. I probably could have fought this in small claims because this guy was an agent and is considered a sophisticated seller under the law. But I just had this feeling that he would beat me up in court, since he had been so crafty in the way he got my deposit. He had been in the business for about 40 years and knew what he was doing. So, I sent him a nice letter telling him basically "Thanks for Cheating Us, I hope you Feel Great About it". This really blew his gasket and was at least worth some entertainment value.

In the second deal, I knew the sellers through my brother and they were really nice people. I was so personally embarassed that my agent was such a knucklehead, that I felt paying the escrow fees was the morally correct thing to do. I held their house off the market for over a month in a declining market and they ended up losing about 10K by the time they found another buyer. I wrote them a really nice letter telling them we were sorry that we couldn't get it together and good luck in selling their property.

That's the way it went and we were $1,200 poorer and wiser after all the smoke cleared.

Bret

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Author: ericans One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75942 of 308659
Subject: Re: disbelief Date: 6/12/2001 9:53 PM
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Alright! Now this is motivation! Looking to be debt free like you in 2002!

Erica

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Author: kk6 One star, 50 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 76005 of 308659
Subject: Re: disbelief Date: 6/13/2001 9:45 AM
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Congratulations to you and your wife! GOod going on not having credit card debt.

You'll encounter this surprise and attitude frequently if you continue to keep no credit card debt. It blows people away.

You'll meet the same incredulity when a sales rep can't talk you into a purchase because it's on sale. The wisdom you show is not expected.

I'll bet that your ear to ear grin still has her thinking. Who knows, you might have put her onto something.

Way to Fool!

KK

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Author: jenniebez Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 76041 of 308659
Subject: Re: disbelief Date: 6/13/2001 12:28 PM
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Why didn't you ask for your deposit back?

My question was why did he feel that he had to back out at all? You are not REQUIRED to go with the appraisal the real estate agent had done- you could get one of your own. You are not REQUIRED to use the lender the real estate recommends- in fact, I never would. He is right that their in it for the money, and that usually means they aren't concentrating on finding the best mortgage rates out there for you. It's not their job- it's the buyers.

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Author: ScrapinBy Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 76086 of 308659
Subject: Re: disbelief Date: 6/13/2001 3:40 PM
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My question was why did he feel that he had to back out at all?

JennieBez,

Thanks for your question.

First, and most importantly, I make it a point to avoid dealing with people that I don't trust. Being naive when I first started house hunting, I assumed that agents and brokers were going to be honest and fair in dealing with me. As soon as I received the appraisal and talked to the loan broker, I knew this person was using his knowledge and insider position to take advantage of me. So, I felt that it was best to back out and deal with someone else.

Second, I did try to counter offer that I thought the house was worth $20,000 to $25,000 less, but the agent wasn't interested in coming down since he already had an appraisal. I'm a lot wiser now and figured out how the appraisal was so high. The "comps" used in the appraisal were from the beach side of Pacific Coast Highway, while the house I was looking at was on the inland side. (In San Clemente, CA this makes a big difference in price.) At the time, I had no clue why it was so high, but I knew that it was inflated because I've lived here since 1983.

Finally, and this is the most honest answer, I was scared to death. I was inexperienced, had no agent representing me and was over my head in dealing with someone who held all of the cards. The best option at the time seemed to bail out before I got sued or taken to the cleaners.

Boy, that's more than enough talking about me. I certainly hope this helps others who are house hunting from avoiding some of my mistakes.

Bret



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Author: lbyrnes One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 76977 of 308659
Subject: Re: disbelief Date: 6/18/2001 2:59 PM
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As a buyer don't ever forget this. No matter how many times your agent tells you they are looking out for you, what they are really doing is getting you to close escrow on the most expensive house you can qualify for. That is how they get paid.

...unless you are lucky enough to live in a state where 'buyer's brokers' are legal. They do not list houses at all...they only work for buyers. I had a wonderful experience buying my first home last year working with a buyer's broker.

Lori

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Author: bstroh Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 76991 of 308659
Subject: Re: disbelief Date: 6/18/2001 3:37 PM
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...unless you are lucky enough to live in a state where 'buyer's brokers' are legal. They do not list houses at all...they only work for buyers. I had a wonderful experience buying my first home last year working with a buyer's broker.

Yeah, but isn't the typical buyer's broker commission still based on the price of the home? I haven't seen a lot of fee for service real estate professionals...



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Author: Stockbuyer2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 77034 of 308659
Subject: Re: disbelief Date: 6/18/2001 7:43 PM
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"Yeah, but isn't the typical buyer's broker commission still based on the price of the home? I haven't seen a lot of fee for service real estate professionals..."

It's paid to them out of the commission that the seller pays on the house. The buyer's agent gets half the commission. I don't know if buyer's agents show people homes that are FSBO or not. I'm not sure how they would be paid if they do.

Stockbuyer2



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