Here's a good idea that even the best agent might overlook

Hi,

I have a suitation that buyer want to renegotiate the purchase price after the inpection in probate transcation. I told the buyer's agent is difficult for seller to notify everyone to approve it.

Grace K

Guy:  Yes... it's not fun when you find out something like this long after the fact.  What you might do is stay in touch with the lender that was mentioned on the pre-approval letter as the transaction goes on.  That way... you'll know right away if the buyer either switches lenders, or if something bad happens.  Just my two cents.

That sort of things can definitely put a wrinkle into the process.

I've seen some cases of seller's writing into the contract that the buyer must use the lender who provided the pre-approval. But also, in today's market delays to closings are commonplace so the seller shouldn't have been "packed and ready to move" until a little closer to the actual closing date.

Now that's an interesting thought.  It may make your buyers give more thought to who does the pre-approval.

That is a good suggestion. . .that will deter buyers to continue shop for rates to the last minute.

This is a great contract language suggestion.

Kate:

No offer is ever a deal until repair (and any other serious contingency) has been handled.

My question would be, did the agent, when reviewing the Contract of Sale with the buyer, explain fully the matter of using a secondary lender??? 

I don't believe that a buyer should be bound by contract to use a specific lender because if the lender screws up, it may be in the buyer's interest to change.  However, there are simply ways to protect the buyer if this happens. 

Binding the buyer to a lender is too Draconian for me. 

I always make sure the buyer is working with two different lenders during the home inspection period if they are concerned about rates. I had a buyer switch lenders at the last minute because of .25 point difference.

Things happen and the buyer should have flexibility with their lender.  They could get a better rate, change programs, etc.  It shouldn't extend the escrow, however, they need to be active in the beginning of the escrow period to get their loan and lender situated right.  One idea to alleviate the seller's worry of packing without a closing is to have them rentback for a week or so after the close.  We do this freqeuntly.  If it isn't in the initial negotiation you might include it when a buyer that is changing lenders and extending the close asks for the extension.  Everybody wins.

Guy - Our contracts say to use "best efforts" to obtain financing...  and "time is of the essence"... and that "seller" can obtain status on financing during the contract process.  I am sure this is common nationally. So if the first lender doesn't work out, the buyer has to move fast to get approval from another... 

If I represented a buyer and received a counter which attempted to bind a buyer to a particular mortgage company I would have to suggest they see a real estate attorney prior to agreeing to that condition.