Lost 4,400 on a wrap that died at the payoff statement

Short version of a wrap in case anyone else is where I was two months ago. A wrap is where the seller keeps her existing mortgage in place and writes me a new, bigger loan on top of it. I pay her, she pays her bank, she keeps the difference. The whole thing depends on knowing exactly what her existing loan is.

I didn't know. She didn't either.

She told me she owed about 196,000 at 3.5 percent. That came from her online account. We agreed on 268,000 with 30,000 down and a wrap note at 7 percent, and her attorney started drafting. Earnest money was 2,500 and it went nonrefundable at the end of a 14-day inspection window.

Week six, we finally got a real payoff statement from her servicer. The balance was 228,000. She'd taken a forbearance in 2020 and the skipped payments were sitting as a separate deferred amount that came due at payoff. Her monthly statement showed the regular balance. It didn't show that.

That 32,000 gap wrecked everything at once. My 30,000 down no longer put me anywhere near where I thought I was in the stack, and her spread got thin enough that she stopped being interested. Neither of us would move on price. Deal dead.

Cost: 2,500 earnest money, 1,650 to my own attorney for the note and deed of trust drafts, about 250 in title and courier. Nine weeks.

What I'd do differently, plainly: get her signed third-party authorization on day one and have the servicer's written payoff statement in my hands before any money goes hard. And write a condition into the contract that the underlying balance is not more than a stated dollar figure, so a surprise is my exit rather than my loss. I asked for the balance. I should have asked for the document, from the lender, in writing, dated.