Last week, we looked at the Agreement of Purchase and Sale.
Today, we turn to one of the most common reasons deals fail:
Financing.
Here are three things every buyer should understand.
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A mortgage pre-approval is not a guarantee
Many buyers believe that pre-approval means financing is secured.
In reality, it is conditional.
Final approval depends on:
• the specific property
• updated financial information
• lender underwriting
Changes in any of these can affect approval.
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Property-specific issues can affect financing
Even if a buyer qualifies, the property itself must meet lender criteria.
Problems can arise with:
• condominiums with financial concerns
• rural or unique properties
• appraisals coming in below purchase price
If the lender is not satisfied, financing may not proceed.
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Last-minute changes can derail approval
Financing can be affected by changes right up to closing.
Examples include:
• changes in employment
• new debt or credit activity
• missed documentation
These issues often arise at the worst possible time and can cost the buyer heavy losses.
Bottom line
Financing risk does not end when a condition is waived.
It continues right up to closing.
Careful planning and communication with lenders can help reduce the risk of last-minute surprises.
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As always, we are happy to assist in coordinating with your team to keep transactions on track.