5 days to close and buyers financing fell through

[Gregg Fritz]

We were moving merrily along the process... i got my final loan approval on our new home.  My entire 4500sq ft house is packed up in boxes in the garage, movers are scheduled, hotel arrangements made, mailing address changed, kids pulled out of school, etc...  We were to close on our current home on the 30th of this month and our new home the 31st as we are also moving out of state due to a transfer.  We got an email last night that the buyers financing ran into a "glitch".

We are told they are seeking another lender, but are waiting to see if their lender can remedy the situation... however they are confident we will not close in 4 days as previously committed. We will know more on Monday.

The buyers have no home, they were pre-approved, and everything checked out perfect... inspection, appraisal, etc... We have been packing for weeks :( If we now have to stage our home again for sale we have to first find the stuff, and unpack...

This is a nightmare.

How the heck can a lender pull out financing so close and with zero indication this would happen? We figured our home sale was a done deal, and were doing everything we could to get ready on time.  

I'm beginning to think that the house we are dreaming of to buy is not in our cards, and we should just get our house sold and move into an apartment until we can find something.  There is no way we could go through this torture again.  The logistics of trying to sell and move in to your new home right away are too hard when all your cash is in your home sale to buy a new home.

Any advice on this?  We don't earn enough to float two mortgages as the new one without a down payment would be a jumbo loan so our current home has to sell.

[Jay Hinrichs]

@Gregg Fritz  its never done until its done.  and or you have a clear to close from the lender.

for a myriad of reasons.

1. their MLO is not very sharp and should never have pre approved them in the first place

2. they are using an out of state lender that gives one's fits.  Like Quicken ( won't sell new construction homes that I build if buyer is using quicken.

3. the buyers being not so swift went and bought something during escrow that changed their ratios

4. the buyers lied about their financial situation and it has come to light.

We are pretty fortunate out here on the WEst coast we get almost zero sale fails from lenders not closing.  I have had it happened to me numerous times in the mid west.. for all of the above reasons.

And I agree it makes it very difficult to do the sale then move to new home when you can't count on closings like you can in other areas of the country.  Most that are in this game though won't pack until they get a clear to close.. your buying another home you have to risk.. you probably Have EM out on that new home.. hopefully you have some EM from your buyer and your contract does not state they get it back if for some reason there loan is denied ( pretty typical)

good luck