It has happened often enough this year to be a pattern. A very well qualified buyer with a significant down-payment, a traditional sale (not short sale or foreclosure), standard contingencies (HOA, Inspections, financing and appraisal) and reasonable time frames.
Guess what, we can't get the contingencies removed! Yes, we get the inspections done, negotiate and finalize the agreement. Check! We provide documents, the waiting period expires and that one is done, too. Check! But the appraisal and financing contingencies--apparently those are just 'guidelines.'
I have read a number of blogs lately saying that communications is the key to this issue. Phooey! I am the master of email, text and voice-mail. Checking in with someone who has no information lets your client know that you are on top of it, but it doesn't produce an outcome. The only outcome my client wants is the contingencies to be removed!
Appraisals are taking a long time to schedule, a long time to generate the report and then they are subject to an underwriting review. The days of the report being turned in and the lender calling you with a thumbs up or down are long gone. No one wants to say an appraisal is okay--or even talk about if it is within reason--until underwriting gets plenty of time to examine it.
Underwriting is also being super-careful on all loans (not a bad thing at all), and this is resulting in many minor conditions that must be cleared before a loan can be approved. I talked to a loan officer today who told me that one of our loans is being held up until a copy of the driver's license is provided and a written explanation about a minor deposit is provided. Let me just tell you, this is not a first time buyer. If they need that minor amount to settle, they have no business buying this house!
So here we sit with a cautious buyer's agent (again, not a bad thing) who wants to wait to remove the financing contingency until we receive full underwriting. Lately, that has been happening days before settlement--way past the 14 day contingency period that has been customary in my area.
In talking to my seller client today, it seems like these financing contingencies need to be reworked. Personally, I am seeing them take more like 25-32 days to be removed. This means that for 2 weeks (if the contract provides 14 days), everyone is on pins and needles wondering if there is a problem with either the buyer's financing or the house appraisal.
The only recourse we have on the seller side is to serve notice and start the clock running for the 3 days to remove the contingency or forfeit the contract. That would not serve anyone needs when you have a strong buyer and a good contract.
Are you seeing the same thing? I have been bumping my buyer's financing and appraisal contingencies up to 28 days and still not making the dates...it is very frustrating for everyone!
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