Deal Falls Apart At The Closing Table! Here's what happened...

By
Real Estate Agent with Edina Realty

All inspections have been satisfied and completed, contingencies have been removed.  We have the "clear to close" from Mortgage.

At the closing table, the call comes in that Underwriting has now rejected the mortgage due to one of the buyers giving two weeks notice at their place of employment.  Her salary could no longer be used on the application and they no longer qualified for the loan.

In this transaction, I represented the seller.  We may assume buyers know better than to do something like this, however, in this market we cannot assume anything.  The house is back on the market, and the buyers lost the home they fell in love with.

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Rainmaker
396,939
Nevin Williams
Sierra Pacific Mortgage Raleigh - Raleigh, NC
Raleigh Mortgage Pro

Darla - That sucks.  It happened to me back in 2004 as I was originating a loan.  This borrower was so needy and took up a lot of my time and when the lender called to verify employment (before funding) we find out that the borrower quit his job a couple of days ago.  I'm sorry that you have to deal with this situation.  Not that this will make you feel better but for what it's worth at least you still have a client seller and can still close at some point.  My hard work was all in vain!  Hang in there : )

September 17, 2009 08:17 PM #1
Rainmaker
121,232
Chris Hill
Century 21 New Millennium - California, MD
Your Southern Maryland Real Estate Professional

WOW! That is truly depressing! So, can the buyers work it out? That really stinks. GOOD LUCK!

September 17, 2009 08:17 PM #2
Rainer
24,248
Betty Hesaltine
Sarah Bice and Associates Real Estate, LLC - Richmond, VA

One thing I tell all of my buyers is "don't do anything to change your income or your credit until after the sale!" I am so sorry for you and your sellers.

September 17, 2009 08:20 PM #3
Rainmaker
275,066
Chanda Barrick
Keller Williams Indy Metro Northeast - Indianapolis, IN
in referral

OK, now that would be really frustrating for your seller!  I hope they had already moved out because they wanted to, not because they thought they were closing!  So does the buyer get their earnest money refunded in this case?

Chanda panda

September 17, 2009 08:27 PM #4
Rainer
28,617
Darla Jensen
Edina Realty - Crosslake, MN

Nevin - It was not a good day.  My sellers are back on the market and we are still in disbelief of what just happened.  Could not believe it!

September 17, 2009 08:32 PM #5
Rainer
28,617
Darla Jensen
Edina Realty - Crosslake, MN

Chris - Unfortunately the buyers could not work it out.

September 17, 2009 08:34 PM #6
Rainer
28,617
Darla Jensen
Edina Realty - Crosslake, MN

Thanks Betty!  I too feel bad for the sellers.  They did not expect anything like this to happen, nor did any of us, including the buyers.

September 17, 2009 08:36 PM #7
Rainer
28,617
Darla Jensen
Edina Realty - Crosslake, MN

Hi Chanda:  Yes, the earnest money went back to the buyers.  My sellers were in a situation that they were not dependent on this closing, however, it is still very much an inconvenience and disappointment.  They had incurred the cost of the septic inspection, water test, had the yard professional cleaned, as well as the windows and home.  The toughest part, of course, was the fact that they thought their home was sold up until the moment they sat down at the closing table.  Ugh.

September 17, 2009 08:42 PM #8
Rainer
58,139
Sukhdev Farmah
Morrisville, NC

it is really frustrating moments specially some thing like that happen on closing table.i have similar experience on one of of my closing.

September 17, 2009 09:04 PM #9
Rainer
56,056
Heather Adkinson
Windermere K-2 Realty LLC www.propertiesinmoseslake.com - Moses Lake, WA
Real Estate Agent - Moses Lake

Horrible.... I would have taken the rest of the day off and then started over again the next day.

September 17, 2009 09:06 PM #10
Rainer
28,617
Darla Jensen
Edina Realty - Crosslake, MN

Sukhdev - Yes it was frustrating, for everyon at the table.  I know the buyers felt like idiots and were also dealing with the loss of the home they were planning on moving into shortly.

September 17, 2009 09:29 PM #11
Rainer
28,617
Darla Jensen
Edina Realty - Crosslake, MN

Heather - You are right - it was not a good day.  Removed the "Sold" sign and went back on the market in the afternoon.

September 17, 2009 09:30 PM #12
Rainer
98,250
Karen Poss
Coldwell Banker Pinnacle Properties, Florence Alabama - Florence, AL
Realtor - 256-366-6292 - Search Florence Al Homes For Sale

I know that had to be frustrating.  Just curious...had the buyer given notice to the employer because of the move and a job change or what?

September 17, 2009 09:41 PM #13
Rainer
28,617
Darla Jensen
Edina Realty - Crosslake, MN

Hi Karen - The buyer gave notice because of both the move and a job change.  Because there was no job history with the future new employer, the lender could not include her future salary on the application.

September 17, 2009 10:11 PM #14
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Rainer
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Darla Jensen

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