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What this task is

This task collects the fully executed sales contract for a property that the borrower currently owns but intends to sell as part of the loan transaction. The contract should clearly show the property address, buyers and sellers, purchase price, key terms, and anticipated closing date. From an underwriting perspective, this contract is how the lender confirms that the property really is in a pending sale status and not simply listed or contemplated for sale. It also provides the baseline information needed to connect the expected net proceeds from the sale and the timing of that sale to the overall loan decision.

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When this task is required

This task is required whenever an owned property is marked as Pending Sale in the loan file. Typical situations include:
  • The borrower will sell an existing residence or investment property to qualify for the new loan.
  • The borrower’s current housing expense is being removed from their debt-to-income (DTI) ratio because the property is expected to close before or at the same time as the new loan.
  • The borrower is relying on net proceeds from the sale as part of their assets for down payment, reserves, or payoff of other liabilities.
In these cases, the lender cannot rely solely on verbal statements or listing activity; they must see a binding purchase agreement that demonstrates the sale is real and progressing.

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Why this task is required

Lenders must understand:
  • Whether the property will truly be sold and on what terms.
  • How much of the borrower’s housing expense can be excluded from ongoing obligations once the sale closes.
  • How much cash will come from the sale and whether those funds are sufficient and acceptable for closing and reserves.
The sales contract provides a contractual commitment between buyer and seller. Without it, the lender would have to assume the property will remain an ongoing expense and that any claimed future sale proceeds are speculative. That could materially change the borrower’s DTI ratios, reserves position, and overall eligibility. By reviewing the contract, the underwriter can:
  • Validate that the intended disposition (Pending Sale) is accurate.
  • Assess whether the closing timeline aligns with the expected funding date of the new loan.
  • Flag any unusual terms that might impact proceeds, occupancy, or eligibility.

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Documents needed to resolve this task

To satisfy this task, provide:
  • Completed, executed sales contract for the pending sale property
    • All pages, with no redactions, including any addenda or riders that affect price, concessions, or closing terms.
  • Any amendments or counter-offers that change price, dates, or key conditions.
  • If available, estimated settlement figures or net sheet from the closing agent showing projected net proceeds (even if final figures will come later).
The underwriter will use these documents to confirm the property’s pending sale status and to connect the contract terms to the borrower’s overall qualifying profile.