The loan guidlines changed mid-transaction. My home sale crashed.

How do you handle the new loan guidelines that seem to be changing every week.

Here's the scenario.

You have your Parker Colorado home for sale and a buyer makes and offer. Your Parker Colorado Real Estate Broker confirms with the lender that the buyer is approved for their loan and everything looks great. Everyone is happy at this point. The problem arises when two weeks before closing and after all the inspections and negotiations, the lender calls and says wait a minute we have new lending guidelines and the buyer needs to reapply for the loan and qualify under the new conditions.

Question #1. Can the lender do this and isn't the lender required to honor their original approval? The answer is Yes and No. They can do that and they are not required to honor their original approval. Some lenders will honor the first approval depending on exactly where in the loan process you are at that particular time. If you have a clear to close you may be OK or if the interest rate has been locked you may be OK. The only way to try and protect yourself is to have your Parker Colorado real estate broker ask the lender if the guidelines change between offer and closing what happens. It may not be much protection but at least you will be prepared.

Question #2. What happens to the earnest money if the buyer cannot close? If they cannot close and the loan conditions deadline has passed without and extension and without a prior written agreement between buyer and seller the money will go to the seller. If the buyer learns this within the loan conditions deadline and they sbmit in writing that they will no longer qualify for their original loan the earnest money will then go back to the buyer. Please understand that there are MANY factors that determine who and how the earnest money is returned so don't automatically think the buyer or seller will receive it. This is a very short overview of the process for informational purposes only.

The best advice is to hire a Realtor that knows the market and the loan guidelines. It still amazes me that when my buyers put in an offer on a property the listing broker never makes contact with my buyers lender to see if the loan and buyer are in good shape to complete the real estate transaction. If you are considering hiring a Real Estate Broker to help you sell your property we would like the opportunity to interview for the job.

Email Steve or Call me at 303-941-4663.

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