Don't: Generate 'iffy' commitment letters
Call this one "seller's limbo."
Buyer and seller reach an agreement. Then a letter from the buyer's bank informs the seller that financing is conditional on a list of things that the borrower must do. Depending on the length of the list -- and exactly what's on it -- "the seller doesn't know if they have a commitment, if they can go ahead and move or not," Phipps says.
It can happen to anyone, he says, adding that every situation is different, so it pays to turn to the pros for help.
The bank's list may offer some clues. If the buyer is being asked to clarify where the down payment comes from, account for a string of late payments or explain a drop in credit score, that could signal serious problems, Phipps says.
On the other hand, if the bank wants proof of the agent's escrow deposit, the insurance binder or the reason for one late payment on a student loan, that doesn't sound as dire, he says.