When I was first licensed in real estate, back in the stone age, we used to be able to take things upon their face value and accept that what was written on paper was actual fact. So much has changed since those days. And, I'm not sure it's for the better either.
I received a contract on Friday on one of my listings. It's a pretty good contract, full price but they are asking for a lot of closing help but what shocked me more was the buyer only put down $200 as earnest money deposit. What kind of deposit is that? If he walks away from the contract, $200 is hardly any compensation to the seller for time wasted.
Then there's the preapproval letter. I have come to learn that preapproval letters are generally not worth the paper they are written on and you can't trust lenders to tell the absolute truth, so help them God. One good thing was that the letter was from a well known national lender, so at least it's worth something and they may still be in business on March 21 when we're supposed to settle. If it were from Mom and Pop Broker I might be more concerned or one of the smaller lending institutions that reported to be in financial difficulty. So, I called the loan officer on Friday, there's no cell phone number in the letter and the letter is really vague. I waited all weekend, with no response, I called him again yesterday morning got his voice mail again, but then late yesterday he finally called me back. He had verified the buyers income and credit score but not his assets. So, I had to wait longer for him to verify that the guy had money.
Now, more than ever, it is so important to verify the letter before your client accepts the contract. But, even verifying the contents of the approval isn't enough anymore. You need to be sure that your lender is going to be around when it comes time to close the transaction.
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