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

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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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Nevin Williams
Fairway Independent Mortgage Corporation - Cary, NC
Senior Mortgage Advisor

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 : )

Sep 17, 2009 01:17 PM
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!

Sep 17, 2009 01:17 PM
Betty Smith
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.

Sep 17, 2009 01:20 PM
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

Sep 17, 2009 01:27 PM
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!

Sep 17, 2009 01:32 PM
Darla Jensen
Edina Realty - Crosslake, MN

Chris - Unfortunately the buyers could not work it out.

Sep 17, 2009 01:34 PM
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.

Sep 17, 2009 01:36 PM
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.

Sep 17, 2009 01:42 PM
Sukhdev Farmah
Triangle Lending Group - 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.

Sep 17, 2009 02:04 PM
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.

Sep 17, 2009 02:06 PM
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.

Sep 17, 2009 02:29 PM
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.

Sep 17, 2009 02:30 PM
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?

Sep 17, 2009 02:41 PM
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.

Sep 17, 2009 03:11 PM
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