The buyer’s agent assured me the buyer was solid, with no issues, and provided a pre-approval letter alongside the offer. The inspection went smoothly, with only a minor issue to address, and the appraisal came back at the contract price. Everything seemed to be moving along without a hitch.

Then, about 10 days before closing, the buyer’s agent informed me that the lender had discovered several NSF (Non-Sufficient Funds) charges on the borrower’s bank statement. NSF occurs when an account doesn’t have enough funds to cover transactions, and it can result in a fee when a check bounces. Because of this, the loan was denied. After nearly a month under contract, we had to put the property back on the market.

A week later, we received another offer. I had a detailed conversation with this buyer’s agent about the creditworthiness of his client. He assured me his buyer was well-vetted, with a FICO score over 700, and there shouldn’t be any issues. After reviewing the contract and the pre-approval letter, we accepted the offer. But two weeks later, more bad news: the lender denied this loan because the borrower had only been at their current job for 10 months, and they required at least 12.

At this point, I was beyond frustrated. What’s the purpose of a pre-approval letter if these underwriters aren’t fully screening the borrowers upfront? Both contracts were contingent on financing, so the buyers got their earnest money deposits back—no penalties, no consequences—despite tying up the property and wasting our time.

Now, the property is back on the market for a third time, but we’ve lost momentum. Showings have slowed down, and we haven’t received any new offers.

How often have you faced this kind of scenario with your flips?

Flipping homes can be a lucrative venture, but selling the property to the right buyer is critical. We have realized that not every potential homebuyer will be the ideal candidate for one of our flipped houses.

Therefore, here’s how to fully vet future buyers and ensure the property gets to closing on schedule with few obstacles.

• Call the lender
  Before committing to an offer, make sure the offer includes a pre-approval letter from the lender. This ensures they have the financial means to follow through with the purchase, reducing the likelihood of complications late in the process. A pre-approval letter from a lender should provide some reassurance, but even though we had one with each offer, both loans were still denied. Because of this, I’ve made it a point to personally call the lender before accepting any new offers. I ask them directly if there are any concerns or issues with the borrower. While they’re limited in what they can share, it helps to get a sense of how thoroughly they’ve screened the borrower. This gives me some insight into their loan process. If I am not completely convinced this lender vetted the buyer thoroughly, I will decline the offer.

• Review the contract terms
  Contract Price: First, assess whether the offer price is acceptable in relation to your asking price. Additionally, look at the deposit amount. If the offer price is strong, ensure the deposit is at least $1,000. A deposit below this threshold may signal a risk, indicating the buyer might not have sufficient funds to follow through with the purchase.

• Scrutinize the loan amount
  Be cautious with offers that include high-risk loans. Two red flags to watch for are offers with 100% financing or an FHA loan with just 3% down. These types of loans should raise concerns about the buyer’s ability to secure funding.

• Closing costs
  Another red flag is if the buyer asks for a significant contribution toward their closing costs. In many cases, this suggests the borrower may not be bringing any money to the table, as your seller concessions could cover their 3% down payment. While this may be acceptable for lower-priced properties, contracts with these terms are inherently high-risk and should be approached with caution.

• Contingencies

  These can greatly influence the success of a deal. Some buyers will include multiple contingencies—such as home inspections, appraisals, or the sale of their current property—that could slow down or derail the sale. While contingencies are normal, excessive or unnecessary ones may indicate a lack of seriousness or financial stability. Negotiate to minimize or remove unnecessary contingencies, particularly those tied to the sale of another property. It should only be accepted if your property has sat on the market for an extended period without many showings or offers. Still it’s a risk if you accept this offer.

• Contract revisions

  Ensure that any changes to the contract are promptly initialed and returned as quickly as possible. Aim to have the finalized contract within a few days, rather than letting it drag on for a week or more. This keeps the transaction on track and avoids unnecessary delays that could jeopardize the deal.

• Closing escrow

  Once the contract is accepted, it’s crucial to have the buyer’s earnest money deposit submitted to the closing attorney or title company within 48 hours. Be sure to email the closing company to request proof that the earnest money deposit has been received. We don’t change the status of the listing to “pending” until the deposit has been confirmed. This ensures that the buyer is committed and prevents any unnecessary delays.

• Inspections

  Most inspections typically take 10-14 days to complete. If the buyer requests more time, it’s important to question why. Once the inspection is done, the buyer’s agent will likely send a list of items they want addressed before closing. Minor fixes are expected, but if there are major issues, it could indicate that something was missed during your renovations or that the buyers are being overly aggressive in their repair demands. You should prioritize fixing the necessary items, but the minor issues can often be negotiated or removed from the list.

• Appraisal

  I always meet the appraiser at the property to personally provide a list of all repairs and upgrades, and to be available for any questions they might have. Additionally, I bring my own comparable sales, simply stating, “This is a window into my thinking of how I arrived at the listed price.” I leave it at that and don’t over-explain. By taking this approach, we’ve rarely had a property that didn’t appraise at the contract price. And, one important tip to remember with an FHA loan. A second appraisal is required if a property is resold within 91–180 days of the seller’s acquisition and the resale price is at least 100% higher than the original purchase price.

Closing checklist:

• All repairs are completed only after the appraisal is completed and accepted

• Termite bond and wood infestation services are completed

• Home warranty has been ordered and paid

• Request a copy of the closing document (HUD) for accuracy and to adjust for any changes

• Confirm with all parties closing is ready with a scheduled day and time

• Give your buyer’s agent and buyer sufficient time to conduct their final walk through prior to closing

• Do not forget to bring a set of keys to closing

Screening homebuyers for a flipped property requires a strategic approach to ensure you sell to someone who is financially qualified and motivated. By doing so, you can ensure a smooth and profitable sale.

So, about our current property, we received an offer that looks very promising. After confirming with the lender that the buyer’s financials were thoroughly screened, we accepted. The buyer has a strong FICO score of 760, a 21% down payment, waived the inspection, and is aiming for a quick, three-week closing. With all that in place, I’m hopeful I’ll be a happy seller come October 25th.