The key lesson here is to really know the house that you’re buying. While seller's disclosures may show some problems, there could be bigger problems, that the sellers may not be aware of. Therefore, you should always hire an inspector and have that as part of the terms of your contract. If you’re going to make such a huge investment in a new home, the small price paid for precaution is worth it. In this case, not only should the buyers have gotten a general inspection, but a wood destroying organism (WDO or termite) inspection as well. This story about preparing for the unexpected and being very transparent with your lender and real estate agent. First time homebuyers, Philip and Dana, were excited about making their first home purchase. They were residing with Dana's parents and decided they were ready to break away and settle into a home of their own. They contacted a mortgage lender to discuss a mortgage loan that would best meet their needs. Philip's credit was in better shape than Dana's but the lender told them they could both be on the loan so that both their income could help them qualify for a nice, yet affordable single-family home. They followed the lender's instructions, and for the most part, provided all necessary information, except for one very crucial piece. Three days before closing, the lender pulled another verification of employment on both Ivan and Paula. Ivan’s checked out, but Paula’s company let her go a week before closing so she was reported as unemployed. The loan was denied! The listing agent for that property sent a signed release and cancellation for the buyers to release the property. The seller put the property back on the market and was able to keep the buyer’s earnest money. The buyers had to scramble to stay in their current location and pay a higher rent amount because it
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