Why a Nonprofit Employee Might Not Get a Mortgage

It is devastating for a nonprofit employee to learn she cannot buy a house.

Today I’m writing about why a nonprofit employee might not get a mortgage. Nobody, especially sellers, wants to hear at the 11th hour their buyers cannot close escrow but every so often it happens. We suck it up and move on to find the next buyer. Still, it stings and is frustrating for sellers. It’s particularly irksome when you hear the mortgage loan officer did not read all of the loan documents.

Headache avoider tip for Sacramento real estate:

Professionals should always open documents and read them before forwarding the attachments.

My sellers asked, because I mentioned it, whether they could seize the buyers’ deposit. That’s always a touchy situation, especially when the buyers have not released their loan contingency. Technically, the buyers’ mortgage lender rejected the loan. Turns out the nonprofit the buyer worked for was losing its grant in 6 months. Yet, another aspect that can go haywire. Now I need to be wary of buyers who work for nonprofits. Because a nonprofit employee might not get a mortgage.

Although the grant is usually renewed for 3 years on its anniversary, the underwriter said no loan for them. A different mortgage lender then assessed the situation and said he could do the loan. The buyer’s agent emailed me to say the buyers are approved with the new lender. That’s the stickler for demanding the deposit. Because the buyers said no. They were done with the whole ordeal.

Did they have a right to give up? Especially after executing an extension?

The buyers initially asked the sellers give them another week extension. We had the signed extension from the buyers. They had agreed to try again. Now the buyers in a fit of frustration decided against that action. It was a worthwhile action to pursue, I felt, because the chances of winning that deposit, although not completely clear cut, were enough to argue.

After laying out options for the sellers, the possible long drawn-out battle in a court that doesn’t always follow real estate law, advising them to seek the advice of legal counsel, they decided it was better to put their home back on the market. As a new listing, of course, with a brand new MLS number. No reason to stigmatize the sellers or the property because the buyers could not get a loan or were unwilling to give it a second try. I’m stuffing this scenario into my red flag list because a nonprofit employee might not get a mortgage.

Part of me says a battle for earnest money would make an interesting court case. But the part of me who works for the sellers and must keep the sellers’ interest first, well, that part said it was best to find a new buyer. The sellers agreed.

Onward and forward. Sometimes a Sacramento Realtor must sell a house twice and get paid once. Nature of the beast. If you’re looking for a fabulous remodeled home with a permitted addition in Sacramento, call Elizabeth Weintraub at 916.233.6759.