A couple buying a seller’s home deposited $25,000 in cash into their checking account just three days before closing. The money was a generous gift from their father to help furnish their new home. However, their mortgage lender ran a final verification of their bank account—a common practice just before closing—and flagged the large, undocumented deposit. Since the funds required a formal gift letter and their father was out of reach on a hunting trip in Michigan, the closing was delayed by two weeks. It is a common practice for lenders to verify bank balances and financial activity right before closing—often within a few days of the scheduled close of escrow (COE). This is part of their final underwriting process to ensure: • No large, unexplained deposits or withdrawals have occurred • The borrower’s financial situation hasn’t changed • The funds for closing are legitimate and properly sourced Even if the buyer was pre-approved and had already gone through initial underwriting, the lender still has the right to re- verify financials to comply with lending guidelines and federal regulations. Lesson to Buyer: Avoid any large, unexplained financial activity or large purchases before closing, and always communicate with your lender about incoming funds ahead of time. (Keep this in mind when you purchase your next home.)
WHY SHOULD THES ULD THESE STORIES MATTER TO YOU?
Do you see how important it is to know the true value of your home? Moral of the story: Anyone can lose money in the real estate market. A seller unfamiliar with the ever-changing market risks selling the home for less than it’s worth or losing a sale because of incorrect pricing at listing. In most cases, sellers never
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