The Deal Fell Through

Recently, a friend of mine was tasked with the job of selling her mother’s home.  Her mother had been sick and could no longer live on her own.  Being the dutiful daughter, my friend took on this huge burden for her elderly mother from meeting with the real estate agent, packing all of her mother’s things, cleaning the home, selling all items that her mother was not keeping, and agreeing to attend the closing along with her mother.  It was a challenging job that took a few months and just as they were about to cross the finish line, the worst thing happened.   All of a sudden, the day before closing, the buyer’s mortgage company found out that the buyer’s employment status had changed and their loan was denied.  The deal fell through and now my friend is back at square one. 

Unfortunately, this scenario happens all too often.  As a seller of a home, you are at the mercy of the buyer’s mortgage company.  All too often, we accept a pre-approval as if it is an actual approval for a mortgage, but in reality it is just a snapshot of your finances at one moment in time.  Lenders today will take an additional look just before final approval and again before closing escrow. There are many factors that can and do change throughout the process.  In the case of my friend, the buyer was injured at work after the pre-approval and went out on workman’s comp.  Since the doctors couldn’t guarantee that she would return to work at the same level as she had prior to the injury, the mortgage company could not approve the loan.   It was a tough pill to swallow, but a lesson well learned.