What can prevent a clearance to close?

Asked by maggangel, Long Beach, NY Tue Apr 9, 2013

Nothing untoward has occurred regarding finances or nor has anything changed with the condition of the house. I am the seller. The buyer has been put through the wringer regarding his finances and ability to purchase and everything is aok.

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Edith Karoline Jasser’s answer
Edith Karoli…, Agent, Winnetka, IL
Tue Apr 9, 2013
I was ready to send you a long explanation regarding your situation, but then I read Mitchell's detailed response, and there is really nothing to add to it..... if the lender issued the loan commitment letter in
writing within the dates of the contract, there should be no issues one would assume.... but then there
sometimes are.....

Your best way would be to carefully read your sales contract or contact a good real estate attorney if you do not already have one, to make sure what the various terms in the contract say about financing, the lenders loan commitment letter in writing, and how these terms affect the current buyer's down payment.

Good Luck to you...

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0 votes
Mitchell Fel…, Agent, Brooklyn, NY
Tue Apr 9, 2013
Dear maggangel:

There are many, many things that can happen to prevent a closing even after getting a clearance to close, especially in this day and age. It is for this reason that some purchaser's attorneys want it written into the contract that if the bank refuses to lend anytime prior to the closing that the purchaser would be entitled to get back their down payment.

A mortgage contingency in a contract would be satisfied once the actual commitment was received. Thus if the bank refused to lend after the fact, the purchaser would risk losing their down payment. There have been so many changes in the way mortgages are underwritten these days that certain buyers who would have been able to get a mortgage several years ago have a tough time today.

If the buyer are supremely qualified, you really do not have to worry too much, unless they use a bank who suddenly goes out of business, but that would be a fluke. You state that the buyer "has been put through the ringer", I think that most of the time when that happens is because there was something lacking in the buyers qualifications to begin with. That in turn would mean that either a) someone didn't do their homework properly when qualifying the buyer or b) the bank made a mistake when they told them they were qualified in the first place.

I will say that 99.9% of the time when the buyer gets clearance to close they do close. So if your buyer got clearance to close you should be crossing that finish line soon. If I can be of further assistance, please contact me direct. Good luck!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes
Simon Campbe…, Agent, Miami Beach, FL
Tue Apr 9, 2013
Other than finances, a problem with title can hold up a closing. It is possible that the title company ran into a problem and that has delayed the closing. If that is the case, you should have been informed as you are the Seller.

I would contact your real estate agent and have him or her get on the ball and see what is really holding up the closing. Making contact with the buyer's agent may be necessary to keep everyone up to date and in the loop.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Tue Apr 9, 2013
Unfortunately since none of us is involved in the transaction, impossible to say what's going with your buyer and his/her mortgage, what is your agent and or attorney advising....
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