Feedback wanted from Baltimore realtors on loans that fall out!

[Chris D.]

Hi BP realtors: I am doing some lending on flips in Baltimore County. I have a real estate license but do not actively list (no more retail for me)! Back in the prehistoric days (80's and 90's) when I was a listing agent, we were able to gather all manner of information regarding a buyers loan qualifications but times have changed. 

I am noticing that some of my flip clients beautiful renovations' get contracts very quickly....especially in the first time homebuyer price range under 200K. I am also noticing that some of these buyers loans' don't get approved and the deals fall through 45 days or more down the road due to the buyer not being qualified. Is there anything a listing agent can do to avoid this unfortunate surprise for their rehabber client? The rehabbers are paying high rates of interest and the clock has to start ticking all over again when a deal falls through. What kinds of questions and diligence can appropriately be done on the part of the listing agent with the selling agent/ buyers loan officer  during the negotiation stages while the buyer is so motivated to buy a property? Would appreciate any feedback! 

[Wayne Brooks]

Yes, some preapprovals are worth less than the paper they are written on.  Two choices...the best is to make the buyers be preapproved with a lender the seller/selling agent trusts, making sure they get tax returns, w-2,s, 3 mo.s of bank statements verifying funds, etc. Secondly, they can require DU approval from the buyer's lender, where the underwriting has also been performed.