Investors, what do you do when a lender changes the terms on you prior to closing?

[Erik Estrada]

Seems like this is happening very often now. I am curious to know what would you do in this instance? 

[Christian Wamsley]

This has happened to me a few times in the past. After cursing their name (privately), I shift quickly into a “save the deal” mindset. That usually means working with the seller on an extension and moving the file over to a more reliable lender.

Now that I’m brokering, I rarely run into these issues anymore—but when it does happen, it’s usually because I took the risk of trying out a new lender.

The bigger lesson here is how to vet a lender upfront to reduce the chances of this scenario. The best way I’ve found is to:

• Disclose as much as possible about the property and the borrower early on

• Keep communication open and consistent with the lender

• Pay attention to red flags—if a lender goes dark during the process or stops giving clear updates, that’s often a sign the deal is in trouble

At the end of the day, surprises still happen in this business, but having backup options and strong relationships with multiple lenders can make all the difference.