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Stupid Things Sellers Do That Cause Mortgage Loans To Fall Apart.

By
Mortgage and Lending with George Souto NMLS #65149 NMLS #65149

This month Patricia Feager and Kathleen Daniels are hosting the March challenge titled  "March to a Solution | ActiveRain March 2023 Challenge"  Patricia and Kathleen are asking us to share issues we have encountered during our professional career in Real Estate, which may help others to avoid and hopefully resolve. 

I have read several excellent blogs submitted so far in this challenge by Realtors/Agents, however, as a Loan Originator my job is to help Borrowers obtain the financing they need to purchase a home.  This involves:

  • Qualify the Buyers/Borrowers  for the price range they can purchase in. 
  • Provide a Pre-Approval Letter for Buyers/Borrowers to submit with their offer.  
  • Help Buyers secure financing for a mortgage loan once their offer has been accepted
  • Advise Buyers/Borrowers through the mortgage loan process, and
  • Follow the mortgage loan through loan commitment, and through the closing.

As a result I am not involved in what goes into a Buyer/Borrower finding a house to purchase, the negotiations, and interaction between Buyers and Sellers during the purchase process.  However, what I do get to see is  the stupid things Buyers and Sellers do which cause mortgage loans not to close.  In my first blog in this challenge, "Easy-Peasy, Wrong!!!" I gave an example of how a Buyer/Borrower can make the loan process difficult, and sometimes even fail because of stupid thins they do.  In this second submission for this challenge I will give three examples of stupid things Sellers do that cause my Borrowers to walk away from the property.

There are two major things I see Borrowers walking away from a property are for.  First and foremost is Sellers refusing to negotiating repairs which are identified by Appraisers and Home Inspectors.  When a Seller takes a hard nose attitude of "I am not bugging", the Borrower more often than not walks away from the purchase.  Many times the purchase blows up because of ridiculous little things, the Seller is unreasonable about.  This is not to say that Buyers is not equally unreasonable as well at times.

The other most common cause I have seen which causes a Borrower to walk away from a purchase is actually things which are discovered during the final walk through just before the Closing.  For whatever reason Sellers seem to think they can hide damage to a property and get away with it.  Some how they think the Buyer will not walk away from the purchase the day of the Closing.  Let me give three quick examples:

  • On the final walk through a huge urine stain was discovered on a hardwood floor which the Seller had covered up with a large rug.  The stain was so bad that a large section of the floor needed to be replace.  It was to late to fix the floor before the closing, and the Seller refused to provide funds to fix the damage after the closing.  As a result the Buyer walked at the closing Table.
  • Another was a Seller while moving their furniture out of the house, dragged the furniture across the hardwood floors causing deep gouges through out the hardwood floors in the house.  In this case the Buyers didn't even go to the closing and try to negotiate a remedy, they walked away right there and then.  Found another house a week later they actually liked better, and we closed a few weeks later.
  • The third example of stupid a stupid thing a Seller did, however, in this case the loan still closed, was a young Seller who loved her outlet and switch covers.  This young lady thought it was OK to remove all the outlet and switch covers just before the final walk through.  In this case the Buyer did not care for the outlet and switch covers she had so the loan still closed when the Seller agree to give a small closing cost credit for the Buyer to purchase new outlet and switch covers.

These are just three examples, I could provide more, but I think these two make my point of Stupid Things Sellers Do That Cause Mortgage Loans To Fall Apart. The lesson that should be learned here is for Sellers to not try to be sneaky.  Be upfront and above board.  Being sneaky creates bad feelings, and blows up transactions.  If everything is above board, no matter the issue, a solution can be found, but when one of the parties to a transaction tries to pull the wool over the others eyes, and creates mistrust, makes reaching a solution very unlikely.

 

Posted by

George Souto
NMLS# 65149

C (860) 573-1308
CALL 7 Days/Wk
Email Me
About Me
My Blog

I am a Mortgage Loan Officer who can assist you with all your mortgage & refinancing questions

I reside in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Haddam. E. Haddam, Higganum, Chester, Essex, Deep River.

 

Comments(22)

Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

George Souto I am so happy you write this post.  A seller that thinks they can stick it to the buyer who purchased their home may be the one who gets stuck with selling their house again.  Karma Baby. Karma. 

Thank you for participating in the March Challenge! 

Mar 17, 2023 07:08 PM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Another good entry into this month's contest. I like how you are linking them, so we get to read them all. 

Mar 17, 2023 07:19 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Hi George Souto ,

Thank you for writing this entry..so many things sellers can do to sabotage a sale at the last witching hour! I've never heard of a seller switching out the outlet and switch covers! REALLY!! That is just plain stupid and glad the buyer caught it and called her on it. What some people consider important to take in the scheme of things when a house closes. Amazing!

Mar 17, 2023 07:39 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

George my friend good advice, I believe next post should be what stupid things buyers do to sabotage the closing:)Endre

Mar 17, 2023 09:13 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello George - education and experience can help but not eliminate all sorts of things people do and don't do.  Life seems to go on. . .  

Mar 18, 2023 04:24 AM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

It seems to be rare that people walk away after a walk-through (at least in my experience) but sellers need to understand it is possible, and trying to sneak one over on the buyer is not a good strategy!

Mar 18, 2023 05:27 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, George... your post reminded me of the time I sold a pre-war coop in New York City on the Upper East Side. We came to do a final walk-through and the tenant who had rented that apartment for years had taken all the antique glass door knobs with her. If you ever shopped for old door knobs like that you know they cost a bundle. We got those door knobs back, by the way, and closed.

Mar 18, 2023 05:42 AM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Good morning George. I bet you have seen some stupid stuff over the years that had buyers walking away. And in most cases, the seller was forced to either make the repairs  before selling again or disclosing the problem and adjusting the price. Enjoy your day.

Mar 18, 2023 05:59 AM
Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

The issues with causing stopping are not always on the buyers but sellers can also ruin the deals as well, as you offer in this post.

Mar 18, 2023 07:43 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Your featured photo says it all, you can't fix stupid, and unfortunately, there are too many stupid people in the world, haha.

Mar 18, 2023 07:47 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Well done, George. It's not only agents who see these occurrences. I can't think of any instances like these that we've experienced in purchasing our own homes. 

Mar 18, 2023 01:28 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

I've also had transactions where area rugs were hiding ugly secrets, that weren't disclosed prior to escrow close.  

Mar 18, 2023 04:41 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi George:

So often issues like these that arise could have easily been avoided. Sometimes it IS the seller who creates the problem.

Jeff

Mar 18, 2023 05:51 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Mar 18, 2023 06:17 PM
Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Top of the morning George.  It leaves us shaking our head many times.  I try keep these things in mind when I am interacting with people outside the RE realm.  Try to think if I am being someone this professional would write about as being 'stupid'.  Common sense comes into play much of the time as well as just putting yourself into the others shoes.  mdm

Mar 19, 2023 09:38 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Your stories are so typical of sneaks!

I'd like to say "Cheaters never prosper," but sometimes they do. When the tenants removed the barbed wire fencing from a property we were selling, we (the agents) ended up paying for the replacement wire.

The part that really frosted me was that the buyer never did replace that fencing. He was just that kind of a slimy guy - as as far as I've heard, he still is. (That's small town living for you 😀)

Mar 20, 2023 04:28 PM
Leanne Smith
Dirt Road Real Estate - Golden Valley, AZ
The Grit and Gratitude Agent

Funny thing about that final walk through. The walk through may be clean, but between the walk through and actual COE, the seller can dump lots of stuff on the property unknown to the buyer's agent.  This happened to us not to mention a big hole in the closet wall that was covered by a piece of furniture.  Some sellers are very unethical.

Mar 25, 2023 08:41 AM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

There is a reason that we have the right for buyers to have a final walk-though included in our contracts.

You have cited specific examples.

Great post!

Mar 26, 2023 05:52 PM
Barbara Michaluk
Weichert Realtors | Phone Direct 240-506-2434 | 301-681-0550 office - Silver Spring, MD
Leisure World Specialist / Full Service REALTOR

Yes, a final walk through can reveal many stupid things that sellers leave to fall in the lap of the buyers. This can certainly present some tension at closing.

Apr 01, 2023 05:40 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great post!  Thanks for sharing and enjoy your day!

Apr 02, 2023 07:24 AM