What happens if my buyer loses their job before closing?
Rob Miller explains what actually happens on the mortgage side when a buyer loses employment before closing — and what options exist to save the deal.
Rob Miller, Branch Manager at MadCity Home Loans, explains one of the most stressful scenarios in real estate — and what Realtors can do when it happens.
What happens if my buyer loses their job before closing?
It happens. And when it does, the lender must act. Here's the reality from the mortgage side:
The Verbal Verification of Employment
Every lender is required to perform a Verbal Verification of Employment (VVOE) within a few business days of closing. We call the employer directly to confirm the buyer is still employed. If that call reveals a job loss, layoff, or leave of absence, the loan cannot close as structured.
What Are the Options?
- New job, same field: If the buyer has already accepted a new position in the same field, some loan types (especially conventional) allow us to close with an offer letter showing the start date and salary.
- Co-borrower income: If there's a co-borrower (spouse, partner) with enough income to qualify alone, we restructure the file around that income.
- Delay closing: If the buyer has a confirmed new job starting soon, we may be able to delay closing by a few weeks until the first pay stub can be verified.
- Terminate: If none of the above applies, the buyer should be advised to exercise their financing contingency and walk away with their earnest money intact.
What Should Realtors Do?
Call me immediately. Don't wait. The sooner we know, the more options we have. I've saved deals in this situation before — but only when I found out fast enough to react.
Related Post: Learn what can cause a mortgage to fall through in our What Not to Do After Your Offer Is Accepted guide.