'New frugality': injecting reality in real estate purchases

Mood of the Market

Normally, I know very fairly few details of my clients’ money matters. The mortgage broker handles that — she sees their bank statements, calculates their debts, and becomes intimately aware of their incomes and what they have tucked away in retirement and savings accounts. Once they have a loan approval, for most of my clients, how much they have is less relevant for my purposes than how much they want to actually use toward their home purchase, and how much they want to spend every month — versus how much they have, and how much they can spend.

So, I was somewhat surprised to make a discovery, recently, about a client who had been really pinching pennies — clear on what she wanted, and qualified at a much higher price point than she was looking, but struggling to find what she wanted in her self-imposed price limitations. She had been house hunting for months and expressing her frustration, but unwilling to inch up in price to get beyond them.