So I was set to close on a condo today and start moving in. That is not happening and for a few days I was really upset. I may have actually dodged a bullet but that doesn't ease the sourness of it going south in a hurry.
The first warning sign came about two months ago when the property appraised lower than the agreed price. We all thought the appraisal was missing a few things and for sure didn't include some features which were of value to me personally, like a second parking spot and storage room in the building. We are cyclists after all.....
So the seller came down in price a bit and I agreed to fund the difference with my own cash. I was at peace with that.
Deal is back on and we reset the closing date to August 1. Getting closer and I'm not hearing much from the mortgage loan specialist at the bank. I try to reach him and he's often not available but finally we connect and I get information. I relay my concerns about his poor communication to my agent who says yeah, it's weak, but she knows him so no problems. Nothing to worry about. About two weeks ago after much pestering I get an estimate of "Cash to Close" but it's not very exact. Higher than I expected but not out of sight high.
A week ago Thursday I get a call from him in a panic (after seeing some kind of concerned email from my agent about me needing to hear from the banker - I was working and only sporadically in touch that day) and he let's me know that the application for the mortgage has been denied. "WTF", I ask. He gives me a rundown of things with the condo and that the underwriter (Fannie or Freddie - don't know much about that) denied the application due to some metric on unit ownership percentage in the association being exceeded. They approve practically everything it seems so not we have the second major negative of this deal. I'm not at peace anymore. Not even close.
But this isn't a problem I'm assured because there are alternate forms of financing available....... Huh? I have perfect credit and a large down payment and no contingencies. I'm a good client. The problem was on his end. My agent is now scrambling for ideas, some of which sound only slightly better than a payday loan outfit and one of which was, literally, "I know a guy who writes personal loans". This was when I knew they were grasping at anything.
I had a furious, but not shouting match, conversation with her about trust and accountability and that this whole thing started to smell rotten. She assured me it wasn't but it definitely stunk at this point. The fact that there were some questions about ownership in the unit was not an insurmountable obstacle but something I was totally unprepared for as it's not my area of knowledge. It's theirs and they should have been able to figure this out long before a week prior to closing.
The "alternative" financing was going to be at a higher rate and that was something I was unwilling to accept because this situation was not of my making. So I pulled out of the deal and will get my earnest money back.
It was infuriating because I had set up utilities, started my association dues, changed my address, paid for some furnishings from the owner and previous occupant, rented a truck, arranged assistance with moving, etc. Then to be blindsided with this failure on the part of the loan specialist was too much.
I'm already moving forward and have a new agent and some new options and have a place to stay so I'm not desperate but it's time to get a new place to live soon too.
Not to bore anyone to tears but I'm curious about other stories of deals gone bad folks have to tell. This one thankfully only cost me time and a few hundred dollars. Far better to have no deal than a bad deal but it's a bummer to lose out on something that looked like a great long-term home.
What else have you folks experienced?
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