Loan Commitment IS a Very BIG DEAL ! Do your Watchdog Duty !
TIMELY POST ABOUT LOAN COMMITMENTS.
Sally and David write about a task that falls to the listing agent or selling agent. This critical contingency related to financing, is one that many agents overlook and buyers and sellers almost always overlook if they understood it at all.
I just finished sending an e-mail to a loan officer, his processor and the buyer and seller REMINDING them of the date certain for the financing contingency to be removed or the contract can be voided by the seller. What's the date?? July 7th. That means that we must have a COMMITMENT letter from the lender by then and 3 of those days are weekend days when only the agents will be working.
"Loan Commitment IS a Very BIG Deal!", Sally and David.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.
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We recently had a transaction....almost one that fell apart (BIG OUCH !) because the Selling agent and buyer were not conscious of the contractual date for loan commitment. When we are counseling a buyer Or a seller we explain that as the day that the contract says that not only is the buyer "financially fit" to buy the house.... it also says the house meets the appraisable standards for the price that the buyer agreed to pay and the Seller accepted.
This is, in Wisconsin, on our contracts (we qualify this since it is the only state in which we are licensed) and watched closely by agents on both sides of the transaction...or should be....missing, ignoring, forgetting that date means the buyer is "out of contract" and risks losing the opportunity to purchase the house. Often Buyers are not conscious of this date...it may be a first time purchase or they regard it as a detail that the agent they trusted will be vigilant in watching and insuring paper is shuffled properly by the lender on a timely basis.
Clues that this may be a problem include:
- Lender has not requested or followed thru to be sure an appraisal has been ordered and returned.
(As a responsible listing agent you have logged when the appraiser requested access to the property and if this is not done contacted the selling agent and/or the lender.)
- The buyer(s) should be sure that every bit of financial information has been provided from tax returns to pay stubs...and that this information has been given to the lender on a timely basis and legibly.
- As a responsible selling agent....you have carefully cautioned the Buyers not to buy the.....appliances, new furniture, new anything or co-sign a loan for sister Suzy's new car that may jeapordize their debt to income ratio.
Part of the very important job on BOTH sides of the transaction is to be the watchdog to be sure that all parts of the contract are being followed on a timely basis.....there is not "it's not my lender....the buyer's choice...." YOU are the professional...be responsible or risk a deal falling apart...an unhappy buyer and any legal complications that may result.
If you are looking for an experienced agent in southeastern Wisconsin to buy or sell your home....and want the deadlines kept and the transaction closed in a timely manner...call the Hansons....you will get the prompt professional service and proven results you deserve.
Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS
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