Just because your clients have been preapproved for a mortgage doesn’t guarantee they’ll stay approved until closing. Their mortgage approval could be at risk if they fall into the trap of overspending—a particularly tough challenge during the holiday season. A few swipes of their credit card on Black Friday or Cyber Monday could have a negative impact on their credit score or financial health, in turn impacting their potential for loan approval. There are certain dos and don’ts to holiday shopping, and following them could help your clients stay on track for a successful closing.
In this article, we’ll walk through a few important things homebuyers should keep in mind during seasonal shopping, as well as explain why they matter. Be sure to share this resource with your clients, either by emailing them this PDF or sending them a link to our Homeward™ blog article here.
Why Black Friday Spending Can Be a Mortgage Dealbreaker
It’s no secret that the weeks around Black Friday and Cyber Monday are packed with irresistible deals. From deep discounts on electronics to flashy “buy now, pay later” offers, it’s easy for even the most disciplined buyer to get caught up in the excitement.
Prospective homebuyers face an additional challenge: they may already be thinking about their future home and all the items they want to buy for it. Maybe they’ve spotted a discount on a sectional they love or a pre-holiday deal on a dining table that seems like the perfect fit for their future home. This forward-thinking mindset is often advantageous, but it can also unintentionally push people toward purchases they’d otherwise pause to reconsider.
The issue comes down to timing. Mortgage approval is based in part on a financial snapshot that’s taken at a specific time. A buyer’s monetary situation will be evaluated during the preapproval process as well as right before final approval, meaning that any major changes to their debt, credit score, or cash reserves within that time can throw off their chances for success (or impact their loan terms and interest rate). Even if clients believe their holiday spending is manageable, lenders may interpret it differently.
This is where your guidance becomes especially valuable. As their agent, you can help protect your buyers from disappointment and potential delays by educating them on the following dos and don’ts for holiday shopping.
Holiday Shopping Dos and Don’ts for Homebuyers
Don’t: Put a Dent in Your Savings
No matter how attractive a deal seems, consider postponing major purchases until after you’ve closed on your home—especially if the cost will add to your overall debt or deplete your savings.
Why? Keeping money in your savings account as a cash reserve can help you look like less of a risk to lenders. It can also help you maintain your history of paying bills on time, which is a major factor in your credit score. Using credit cards instead of cash has its own hazards; increasing your debt-to-income ratio can nudge the needle downward on your score—exactly what you don’t need when purchasing a new home!
Do: Go on the Hunt for Small Appliances
While large purchases are a no-no during your mortgage loan process, smaller, more affordable finds are fair game! Black Friday and Cyber Monday are perfect for picking up essential kitchen gadgets like a blender or a toaster—items that will undoubtedly come in handy in your new home.
However, it’s wise to keep your spending in check. A few well-chosen small appliances can enhance your cooking experience and add to your new kitchen’s aesthetic without straining your budget. Just remember, it’s all about forethought (try to resist those impulse buys!), balance, and ensuring that your purchases align with your financial goals.
Don’t: Get Pulled into Big Furniture Deals
Big furniture discounts often catch the eye of eager shoppers, but be wary. Not only are these purchases a big hit to your bank account or credit card, but they may end up being a poor choice for your future space, especially if you haven’t found your dream home yet.
Sofas, in particular, are notorious for looking much smaller in the showroom than in your living room. To avoid buyer’s remorse—and a potential interest rate hike—we recommend saving your money and splurging on furniture after you have the keys and can take the appropriate measurements.
Do: Go on Model Home Tours
Black Friday weekend is a great time to scope out communities and floor plans in the areas where you may want to live. Plus, you won’t have to get up at the crack of dawn to beat the crowds! Touring homes in person provides you the opportunity to experience a floor plan’s layout for yourself, while also exploring the surrounding community.
Many of our notable neighborhoods across the country have model and quick move-in homes that you can tour. Check our website to see Sales Center hours, and whether you’ll need to make an appointment.
Don’t: Open a New Credit Card
Retailers frequently promote card-opening incentives—tempting shoppers with extra discounts or reward points. Plus, it may seem like a good solution to put purchases on a new card so you can take advantage of deals even when you don’t have enough cash on hand. However, as any mortgage consultant can tell you, opening new accounts before or during your mortgage application process is not a good idea. Adding accounts can lower your average account age and introduce hard inquiries on your credit report, which in turn could negatively impact your credit score. Not something you want during the loan process!
Do: Take Some Time to Relax with Friends and Family
While it’s easy to get caught up in the excitement of Black Friday and Cyber Monday shopping, remember that Thanksgiving weekend is ultimately about being thankful for what you have and the people in your life. Take a step back from the commercial frenzy to spend quality time with loved ones. Engaging in meaningful conversations and enjoying each other’s company can create cherished memories that outshine any sale.
If you do decide to venture out to shop, make it a festive outing instead of a stressful one. Share laughs, grab a meal, and celebrate the season together. These moments are invaluable and serve as a reminder of what truly matters.
Extra Credit: Dos and Don’ts for Agents During the Holiday Season
While this guide is designed primarily for your clients, the holiday season also gives real estate agents unique opportunities to strengthen their business and prepare for the upcoming year. Below are a few thoughtful dos and don’ts to help you stay organized and effective.
Do: Use the Season to Educate
The holidays are a great time to send out educational emails, share helpful resources (like this article), or create social content that adds real value to your clients’ (or prospective clients’) homebuying journeys. Not only will your clients appreciate the assistance, but it also may keep you top of mind for referrals heading into the new year.
Don’t: Assume Clients Already Know the Rules
Even savvy buyers can make small financial missteps without realizing the consequences, especially during the holiday season. This time of year, many are juggling travel plans, family obligations, gift-buying, and more, so it’s completely natural for homebuying dos and don’ts to slip their minds. A gentle reminder from you could help prevent last-minute loan issues or delays, as well as protect your reputation as a trusted advisor.
Do: Stay Available and Proactive
Some buyers may begin browsing for homes online during the holidays, even if they don’t plan to move until spring. Keep your contact lists up-to-date, respond promptly to leads, and check in with existing clients, perhaps with a card, a holiday gift, or even just a quick phone call to say hello. Take advantage of this quieter time to nurture relationships that may pay off in the new year.
Don’t: Forget to Keep Up with Our Blog
Our Agent HQ™ blog features an extensive library of articles designed to help you, your business, and your clients. A few notable ones to get you started:
- Year End Checklist for Real Estate Agents
- 6 Real Estate Resolutions to Boost Your Business This Year
- Real Estate Branding: How to Build a Strong Personal Brand as an Agent
- Real Estate Agent Tips for Self-care During a Busy Season
- How a New Build Home Warranty Can Help Strengthen Your Client Relationships
Final Thoughts: Balancing Shopping and Homebuying
As your clients navigate the busy shopping landscape during the holidays, it’s important for them to keep their goals top of mind. By following the dos and don’ts outlined in this guide, they can enjoy the thrill of seasonal deals without potentially jeopardizing their current or future home purchase.
For you as an agent, sharing these tips can help you secure deals, strengthen your relationship with clients, and offer long-term value to homebuyers. Your thoughtful guidance could make all the difference in helping buyers reach the closing table with confidence.
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