Profile picture for nicolerlapage

Need advice..buyers may need extension

Oh geez! I was scared this was gonna happen. My husband and I sold our house and are to close on the 18th. We have already moved and got a call from our real estate agent that lenders (USDA) found a few hiccups on their credit that they are paying off tom. and then going to get a rapid rescore, Their agent may need an extension of a week. Im of course freaking out because well... that's a mortgage and rent that we will be paying if this falls through. I know there was always the risk, but of course they said that everything was looking good so far. Any advice? Is this type of situation common? And what is the likelihood this may still close?

  • March 06 - Nashville
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Answers (15)

Profile picture for sunnyview
Many stories about USDA buyers who fall through at the last minute. I don't know if that's because they are zero down loan so the margin for slipping out of qualifying is narrower if the ones you hear about are just flukes or if it is something else. Ask your agent stays on top this day by day so that the ball does not drop and so you have an early heads up if it's not a go. 

If your buyers are close to closing, ask for a hard close date at that 1 week point and don't agree to another extension without a nonrefundable deposit to cover some of your expenses. It is scary to carry two payments, but hang in there tell your agent how you feel and keep your fingers crossed.
  • March 25
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It almost sounds like your buyers ended up switching to a different type of loan or a new lender.  If that's the case you are basically starting the process over with the same buyers, so you're probably not going to close for 2-4 weeks depending on the lender.  In that case I would ask my agent to try to renegotiate with the buyers as they're costing you an extra mortgage payment, taxes, insurance, etc.

Best of luck!
  • March 25
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Profile picture for nicolerlapage
I just found out that that the house head to get reappraised( it did yesterday) and their credit issue has been cleared up per my agent. I still didn't understand exactly what happened with the buyers loan. My agent said the whole process pretty much had to start over and is on "rush". We are to close this Monday and they haven't requested a extension yet. I have no idea.. Just sitting here waiting . We won't put it back on the market we will rent it out
  • March 12
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Profile picture for Ofe Polack
What has your listing agent have to say?  Closings are postponed for a variety of reasons and we do not have enough information from your message to decide if this one will fall through or if it is a simple hicupp.

I am sure that you did not move from the home you are selling until you received the letter of commitment, is that correct?

Ask the buyer agent to give you a timetable, and a clear explanation of what is happening.  Also find out if your property is showing as Pending or Active with Contract.  If it is Active with contract I will start marketing it and showing as soon as possible, in case this deal falls through.  Keep your fingers crossed and a positive and open mind.
  • March 12
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Profile picture for user6064703
There's is an 82% chance the deal will still close, so you shouldn't worry too much. 
  • March 12
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Thanks for posting your question on Zillow.com & sorry for your troubles.  It is not uncommon for closings to get postponed.  There are so many factors down to the wire.  There is really no way for us to answer if it will close.

If it doesn't, you can put it back on the market & sell it again.  The market is healthy.
  • March 12
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Profile picture for Dalberth Group
Extensions are common.  How concerning they are depends on the circumstance. 

Given the limited information you have provided, it's hard for us to give you any significant advice... Use your own (or your agent's or lawyer's) judgment based on what the agent is telling you.  But a week doesn't sound like a dealbreaker given how much time you've already sunk into it...  (Unless you have another offer that expires within a week or some other similar circumstance...)

Good luck.
  • March 07
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Extensions are pretty common in real estate. There are so many things that can pop up during the process of a loan. I recommend my seller's to not move out of a place until we get a copy of a loan commitment letter,  and even then it's risky. You never know if someone might lose a job the last week of closing. 
Keep showing your home for back up offers, in the event it does fall thru. Hopefully everything will work out, government loans just take extra time, VA  FHA a good 45 days, 203K much longer in my experience. Some mortgage brokers can do them quicker. Cash sales.. can close within 10 - 15 days provided there are no liens on the property.
  • March 07
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I forgot to answer your question regarding you obtaining the earnest money if the deal falls through...

If you continue to sign extensions for mortgage commitment the answer is NO, the buyers deposit is NOT in jeopardy.

If you don't sign the extension (the buyer will need to send a notice of withdrawal to protect their deposit).

If the buyer and buyer agent totally fail to send proper notification of withdrawal and fail to get you to agree to an extension of mortgage commitment date... THAT'S when the buyers deposit is "in jeopardy", however even in that case this money does not simply get sent to you... you still need to go to court and a judge needs to authorize its disbursement OR the buyer has to "release" to you (lets assume that's not going to happen!),  Ive also seen rare occasions when an unscrupulous real estate company would attempt placing stipulations in a listing or P & S vying for a large portion of that deposit actually be do to THEM! (I don't believe a Judge would ever go for that however, no matter what the contract says).   
  • March 07
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One of the stipulations of a USDA loan are one simply stated fact "you can't qualify for another type of mortgage" (if you do... then you don't qualify for a USDA loan),  that's what I mean when I said the buyer was more risky from the "get go".

The buyer was evidently "pre approved" based on a credit report that clearly changed for "whatever reason", if its a simple/fixable reason it will be reflected a week or two after your billing cycle ends for a particular line of credit. In most cases a credit score takes over a month to update.

If this is a simple easy things (just a lil' glitch that someone knows exactly can be remedied with letter or submitting evidence of a payoff or whatever) 2 weeks is being kind... if you don't see stuff happen within that time frame prepare yourself for a long wait if you don't have another buyer in place ready to roll!

Time for your list agent to earn their money! I know what I'd be doing...
  • March 07
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We don't know. It will probably close. My advice is to but the heck out of your agent and the escrow company!

All the best,
  • March 06
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Profile picture for wetdawgs
No, it does not mean the loan already fell through.

Pre-approval does not require such an extensive investigation into a person's finances as approval. 

I disagree with Doug.   Although USDA loans are with 0% down payment and maximum income limits, Doug paints a pretty gloomy picture.   I do agree that your agent needs to keep the fire burning brightly under their agent etc.

  
  • March 06
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Profile picture for nicolerlapage

Thanks for the responses! Does this mean that the loan has already fell through in a sense? Our agent said they has a preapproval letter? So how does this happen 10 days before close?  We may have to put our house on the rental market if this falls through as we know that will be a quick financial fix to pay the mortgage. We are financially not in a position to start from scratch and float both rent and mortgage. And if the loan falls through do we get there earnest money?

  • March 06
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The fact they are USDA buyers tells us they could not qualify for anything else (so they were more risky from the "get go"). at this point you cant do a lot to protect yourself other than making sure your Realtor is lighting the fires and fanning the flames under butts. I would not mind an extension of 2 weeks or so to then pull a rapid credit in hopes something changed. But along with that extension I would request the property be marketed and shown again in the event the worst case scenario occurs.

If things start going over that 2 week mark.... time to hold feet to fire and explain to the lender they will not be closing on this one unless they give the damb loan and give it right now!

Love my job! hope this helps.... 
  • March 06
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Profile picture for wetdawgs
Advice:  breath deeply and keep your fingers crossed.     Ask your agent to investigate a bit further to give you more confidence, AND have the marketing campaign ready to reactivate in less than a second if it falls through.    You never know until the money is in your bank account, it gives some of us grey hair.
  • March 06
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