This past month I had two deals where my clients, the buyers, were approved with the banks. Then the houses were turned down.
It created a lot of confusion for the sellers and their realtor, and it put our offer in jeopardy.
This is a new trend I've been seeing in my deals and hearing about from colleagues and bankers in the business.
These days, when the banks send in their evaluators, they don't just assess value. They also report back about any cracks in foundations, or major up-keep issues. This raises red flags on the file and the loan officer will likely ask to see the building inspection report.
Inspection report can bring up more problems than expected
The state of a property tells a story. Overdue maintenance on brickwork, cracks in the foundation, a deteriorating leaking roof will all significantly lower the value of a property.
When a property is flagged and the loans officer requests the inspection report, you must oblige, even if you put in an offer that was not conditional upon an inspection.