5 Mortgage Deal Killers Every Realtor Must Know (And How to Rescue the Sale)

Deals die every day because of five preventable mortgage mistakes — and most realtors do not see them coming until it is too late. In this episode, Scott Dillingham reveals the exact deal killers that blow up transactions before closing, and gives you the rescue strategies to save the sale before it is gone.

Scott starts with appraisal issues, one of the trickiest deal killers because realtors and brokers have the least direct control over the outcome. When a home appraisal comes in lower than the purchase price, the financing gap can collapse an entire transaction. Scott explains how working with a mortgage broker provides a significant advantage here. Brokers can dispute the appraisal by submitting recent comparable sales to challenge the appraiser's valuation. If that fails, they can order a second appraisal through a different approved appraiser, or pivot to an entirely different lender, an option that clients working directly with a single bank simply do not have. In Canada, mortgage lenders will only fund up to the appraised value, so buyers must either make up the shortfall with additional funds or find a lender willing to work with a more favourable valuation.

Next, Scott tackles undisclosed debts, a problem that often surfaces at the worst possible time. While Equifax is the primary credit bureau used in Canadian mortgage lending, it does not capture everything. Some debts appear only on TransUnion, and others may be uncovered when the real estate lawyer conducts their due diligence searches on the borrower before closing. Scott emphasizes that debt ratios for insured mortgages in Canada are capped at 44% total debt service (TDS), but different lenders calculate minimum payments differently, creating opportunities for a broker to find solutions even when one lender says no.

Job changes are the third deal killer Scott addresses. He advises realtors to strongly counsel clients against switching employers between mortgage approval and possession, as employment stability is a cornerstone of mortgage underwriting. Exceptions exist for scenarios like being headhunted with a significant salary increase and no probationary period, but these require careful handling with the broker. The fourth issue is condo status certificates, which can derail deals at the last minute since lawyers typically review them close to closing. Scott recommends building a condition into the offer that requires satisfactory review of the status certificate and reserve fund upfront, particularly for older condominiums that carry higher risk for underfunded reserves and special assessments.

Finally, Scott discusses property issues including environmental concerns, zoning complications, and distressed homes. He highlights the purchase plus improvements mortgage as a powerful tool for homes that fail initial lender inspections, allowing buyers to address property deficiencies and roll renovation costs into the mortgage. He also notes that experienced brokers have access to lenders who accept mixed-use buildings and can make exceptions for commercially zoned residential properties, solutions that are typically unavailable through a single bank.

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