Another Deal Bites The Dust

[Bill S.]

Today I had to walk away from a flip deal I am selling after 55 days under contract. I was in deep and it was a tough call to make. I wanted to put up the story on BP to other investors and see what they think.

The story is that the prospective buyer presented a 30 day close. On day 53 I followed up on the loan with the lender who told me the file was submitted on 11-20-15 . Then followed up with the buyer's broker who told me the lender said the file was resubmitted on 11-25-15. I emailed the lender asking for clarification and never heard back from him.

At day 54 I contacted the lender's manager to check out the file and told the buyer's broker that I can't continue giving extensions. In the afternoon on day 54 I am told the loan was denied but that they can switch the loan from conventional to FHA. I get the details from the lender and relay everything to my lender for feedback. My lender tells me something isn't adding up and it appears they are scrambling to save a dead deal.

I talk to the lender and lending manager on day 55 and they tell me something different this time that actually makes sense. The mortgage broker and buyer's broker are telling me how confident they are that the deal will close (100% they say). I agree to extend only if the buyer provides additional earnest money and agrees that all earnest money is non-refundable. The buyers are willing to do it initially and change their minds after speaking with their attorney.

The buyer's broker tells me the attorney advised the buyer that my request is unreasonable. She tells me repeatedly how wrong I am to assume it's reasonable for the buyer's to risk their earnest money. She tells me that I am just cancelling the deal so I can sell it for more money now. I tell her that if its a 100% chance of closing like she says then they aren't risking anything and that if they won't put up the earnest money they don't believe it is a 100% chance of closing.

What do you think?