I would say it's not that common as long as the buyer has been honest and doesn't go out and buy a car or some other large purchase in the process of getting a loan.
Unfortunately it does happen though. That's why it's important to have a lender you trust and to have the buyer double app with the lender of your agent's choice. Better to be safe than sorry!
This depends on who is issuing the approval. Even though the basic process is the same, not all mortgage professionals are created equal - and not all mortgage companies have the same exact requirements. If the approval is done correctly and credit scores, assets, pay, and situation are documented accurately on a 1003 loan application paired with a good loan officer I would say the chances are very high in closing. This should be common place but there are lots of possible pitfalls - not verifying what a buyer tells you is a common one I run into when I talk to loan officers. If you don't verify everything - it's just a pre-qualification. Then it's a crap shoot.
Knock on wood that has never happened YET :) If they are iffy they get docs first before sending people down the road of self distruction.
If your in Hampton Roads and would like to use one of them go to http://www.grapevinereferrals.com
Hope this helps.
This should never occur with a really good loan agent that really has you preapproved (underwritten by the lender with only contract and appraisal as conditions).
But it does happen...preapprovals are issued through many websites with the borrower answering questions and the bank assuming that supporting documentation will be available. This is not an approval. It is a credit approval. Credit has been pulled, but no documentation authenticated or funds verified or employment verified.
But let's say the preapproval is a bonifed true approval. How could it be unable to get approved?
The borrower could lose h/quit their job. Lenders call to verify employment the day of funding!!
The borrower could lose all his down payment money (stock crash, gambling,)
The borrower could run up credit cards (or worse buy a car) to furnish the home and completely ruin the approved ratios. Lenders run a final credit at funding!!
Or...the money was brought in from another country and taxes have not been paid and they find out that they will owe more on taxes than they can afford (i have seen that one first hand!!)
It is not a common occurrence. But it can happen.
We never say never...but take every precaution for it not to occur.
Your frend & Realtor,
RE/MAX of Valencia