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Do This Before You Unzip Your Pants

Call everyone on your team.

Your real estate team.

Get your mind out of the gutter.

I’m in the middle of buying a new principle residence and almost made one of the most deadly, amateurish mistakes in the history of time: removing conditions without making sure they’ve actually been satisfied.

In my case I recently returned to a job and most people in new jobs don’t have a payment history or they’re on probation or something. You can be pretty much certain that the bank is going to call your employer. My broker had sent me a commitment from the lender and I thought we were good to go, so I removed conditions. I didn’t realize that the lender hadn’t called my employer yet. If something had been wrong or the HR people said they were about to fire me, my mortgage would have disappeared and we would have been screwed.

If you wave the conditions of purchase (a.k.a. go unconditional) and your mortgage falls through, you’re screwed. At the very least you’ll lose several thousand dollars worth of deposit and at worst you’ll be forced to complete the contract. Now, if you do lose the mortgage you’ve lined up, there are usually alternatives, both with regular lenders and with secondary lenders. It’s much simpler to follow one simple rule:

Before you go unconditional, call all the members of your team and make sure you’re good to go. Get it in writing from your mortgage broker/banker.

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    { 3 comments… add one }
    • Neil Uttamsingh January 28, 2010, 8:11 pm

      Chris,
      Good advice on calling all of your team before removing conditions.
      I like how you say call ‘all’ members, and not just ‘one’ member.
      By calling all, and talking to each one of them, this reduces the risk of any blunders.

      Onwards and Upwards,
      Neil.

      • Chris February 1, 2010, 5:20 pm

        Seriously, so scary. My Dad was also my Realtor (and is a very experienced investor and property manager), so calling him once I realized my mistake was scary….but a good learning experience. I’m just happy things worked out.

    • Mark Loeffler February 4, 2010, 7:17 pm

      A very important reminder to all of us to be thorough and cover our own – er… assets, no matter what.

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