In our business sometimes one thing going wrong can make other deals fall.
We don't like sales that are contingent on other sales. We advise our sellers against them. So we let the sale be contingent on funding. The unspoken fact may be that the buyer might not qualify for the new loan as long as he has the old loan. So the contract falls because another sale did not go though. I have heard of quite a number of deals falling due to one deal not closing. Technically the sale is not contingent on the sale of the home but the buyer is only loan worthy if the other one sells.
Right now I have a buyers who are trying to purchase something with cash but they only have the cash if they refinance their home. It looked very good until yesterday. The lender decided 5 acers constitued a working farm. Now we are stugglling to get the home refinanced quickly. I have until Feb 8 to get my deal closed.
We have 3 options:
1) convince original lender the home is not a farm
2) hope my favorite lender can come through
3) Ask for the earnest money back. Sell the home. Buy something else once the home is pending.
Not quite the domino effect but close
Comments (6)Subscribe to CommentsComment