They are technically in breach of Contract if they change without asking the sellers and changing the Contract to reflect the new loan program.  

Yes, it happens and it's worked out in the end more times than not.

Happened with couple of my buyers - and we did close, on the wire....

Yes... and it went fine.

Thats when I would start looking for a new buyer.

That's breach of contract. Mt counter offer prevents it, but yes it has happened that's why I prevent it. But, we're out of contract should they do so.

have had many different scenarios, and we all worked together to keep the deals going... 

Yes, it was fine.

Thank you for asking Anonymous. 

I have only had this happen when I was representing the sellers, never when I was representing the buyers.  In all cases, everything went fine and closings went off as scheduled, however, in those cases, any financing contingency does not cover the buyers in the event of default unless the sellers agree to the change of financing type. 

Yes - fine

I had one recently where I had the seller and it was a conventional loan per the contract and the FHA appraiser called me to set up the appraisal.  I asked the agent if that was an error on the lenders part and found out they had changed the loan from conventional to FHA since the buyers didn't have enough for the costs associated with the conventional loan.  My sellers went along with it because they wanted to sell but seven days before closing we received a release and cancellation of contract due to buyers not getting financing.  I did  ultimately get the home sold but that wasn't a great situation.

Yes, it happens, and sometimes it works out just fine.  But changing, as in your example from conventional to FHA, is a significant change and should be discussed with the seller and agreed upon in writing.  Some sellers choose a buyer and offer because it is conventioanl instead of FHA/VA or other type of loan program.  In your example, FHA can cost the seller more money, the appraisal has different requirements and the condition of the home could be more in question, so it can definitely cause problems.

I had one many years ago where the lender changed the loan program without telling me OR the buyers.  It was a disaster.  We had made an offer NOT contingent upon the sale of the buyers home and they were qualified for it.  During the process the buyer got an offer on their home and the lender knew it so made some change to the loan program, not sure what it was exactly but they thought they were doing their client, the buyer, a favor by giving them a better program (maybe it was more money down so no MI or lower interest rate or something I can't remember). Well, their home fell out of escrow and then they couldn't buy the home they were trying to buy that was not supposed to be contingent in the first place.  It's a long story, but it was seriously a disaster.  It closed 2 months late and was a nightmare the entire time. -Kasey

No not in the middle of one.. had plenty I wanted to use again but they weren't available at that point

A couple of times.

I've had it change but only with an Amendment to the contract and signed off by all parties. It's worked out fine..no problems.

Asking of student questions as Anonymous is against the rules, per Active Rain Staff Bob Stewart.  Reporting.

Yes, and that is why I have an addendum with all offers addressing this very bait and switch tactic. 

It occurred once and the transaction fell.

It does happen, however, both parties would be in breach of the contract. That is why open communication is so important.

For us in Oregon, a loan change must be approved by the seller. Typically this will delay the closing.

It has happened.  Some went smoothly, while others had issues.

Ask your instructor

I have got a sale right now where the buyer switched from Conventional to FHA. We just want it to close.

If loan programs change, it must be on amend/extend and approved by all parties.

Yep and we closed on time.  

Yes, it had happened ,  when I worked with investors who offered cash and suddenly switch to financing, or as you said, they could not get FHA and had to go with conventional. It is up to principals to decide if they want to continue and close or cancel and start over. 

Thomas J. Nelson, Realtor, CRS gave you a great answer.

Yes and it worked out fine.  Buyers agent was new and actually called me to ask if they could change loan types in mid contract.  All paperwork was completed - did change our closing date slightly, which was good for my client.

Yes.  Everyone lived happily ever after.

No. I use ethical quality lenders.

No, just a change in lenders. Changing the program would be an issue with the contract terms and sellers would have to agree.

Happens all the time. 

It has happened with an addendum.

Yes, it did not affect the closing date so it went well.

not at this time