Don't Accidentally Start a Fire. Install a Fire Detector Within Your Contracts

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI

 

 

Don't Accidentally Start a Fire

 

Install a Fire Detector

Within Your Contracts

 

 

 

 

         From start to finish ... the dates and chronology of a Real Estate Contract have become increasingly important to the outcome of the transaction.  This is certainly true here in my  Will County, IL  housing market, as well as across the nation.

 

      But as of late, I've received some  Real Estate Contracts with some time-frames written into them that have been absolutely impossible to meet.  To offer an analogy, they were a smoldering fire just waiting to burn.

Contact Gene Mundt, Mortgage Lender

 

     Perhaps my most clear-cut example of this was a recent loan where I received the freshly negotiated contract on my desk mid-afternoon on a Tuesday, and then received a call from the Seller's attorney early the next morning wanting to know if I had the loan Clear to Close yet. 

 

     Really?? 

 

     The return to a healthier housing market has brought competition back amongst Buyers for desirable sales properties.  That's a positive.  However,  I'm now beginning to see Closing dates on Contracts being used as bargaining tools.  Dates being used in efforts to enhance the desirability of a Buyer's offer ...  the strategy being that a quicker Close might catch the eye of a Seller and deem the Buyer more attractive. 

 

     Listen, I "get it" and see the temptation to do this.  However, a realistic  Closing timetable in the present market is 45 to 60 days out.  Banks, Lenders, title companies, attorneys, appraisal companies, etc. just don't have the staff to keep up with the present demand or get things done faster.  (Beware of those that say they do or can.)  Don't look for this problem to go away anytime soon.

 

     But so often, the current problem also boils down to this ...  Who's the Seller of the property you are interested in?  In the current housing market, the participants do not always reflect the traditional Buyer/Seller/Realtor transactions of old.  Rather, the Banks are approving a  short-sale contract.  Add  "corporate seller" into the mix too ... a Seller that can agree to the Contract only  AFTER  a week to 10 days of working through layers of management before signatures are obtained.

 

     My opinion is that we don't have all parties to the transaction in sync right now, and the system is broke.  I'm sure many will wholeheartedly agree with me in that assessment.  With Lenders, such as myself, needing to see a finalized fully-executed  Contract before  I can ultimately achieve a  FINAL LOAN APPROVAL ... the whole mortgage process has been slowed way down. 

 

     When 8, 10, 12 days  can transpire on a Contract prior  to my being fully capable of acting upon it ... and the Contract's Closing date is scheduled  30 to 40 days out?  You have a disaster just waiting to happen.  A fire is smoldering and about to break-out.


     Those time-frames don't and can't work for Lenders right now.  In many cases, we realistically don't have the time needed to secure clear-to-close.  Requests for Extensions of all kinds will have to be made.

 

Contact Gene Mundt, Mortgage Lender     So what's the answer?  There IS no pat or quick-fix answer for these scenarios.  But ALL parties and entities involved in a transaction must demand and strive for more realistic Contract Closing dates.  My message to my Buyers is this ...

 

     Start the formal  Loan Application  prior  to offering to buy a Short Sale Property or a Foreclosed Property.  Get some preliminary work done.  Start in ADVANCE of waiting/hearing of Bank or Seller Approval.  If you don't, you run the very real risk of NOT receiving your Loan Approval on time and delaying your Closing. 

 

     I always ask that the Buyer's Agent assists me in convincing the Buyer to take this action.  Many do ... and I've always found that in those instances, our combined efforts work much more successfully in accomplishing this goal.  

 

    Don't accidentally start a fire.  Install a fire detector within your Contracts.  Let's work together and find ways to keep the heat to a bare minimum ... avoid the fires ... and get our transactions closed successfully.

 

 

 

 

     *  Are you (or your clients) hoping to buy a home in  Will County  or elsewhere across Chicagoland?  Contact me  now.  I will put my 35+ years of experience and expertise to work on your behalf and guide you through processing to a successful mortgage Closing.

     I can be found at any of the following:

Direct/Text:  708.921.6331

Email:  genemundt

www.genemundt.com

Skype:  630.219.1316

Mobile:  m.genemundt.com

     

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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

Email Me .. to be added to my Mortgage & Real Estate Newsletter

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Corinne Guest 09/12/2012 03:57 AM
  2. Gabe Sanders 09/16/2012 09:11 PM
Topic:
Lending / Financial
Location:
Illinois Will County New Lenox
Groups:
Mortgages
Chicago Area Real Estate BUZZ!
Buyer Information - What Buyers Need to Know in Today's Market
Bananatude
WillCounty
Tags:
buying a home
expectations
real estate contracts
closing dates
setting closing dates
timeframe for closings

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Rainer
329,226
Donald Reich
Prudential Centennial - New Rochelle, NY

Everyone once in a while a bank will surprise you with a quick commitment letter, but you have to assume that closings just take longer these days.

Excellent post!

Sep 12, 2012 01:11 PM #7
Rainmaker
1,079,379
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Closing dates are the bane of my existence sometimes - because they are a moving target in the hands of lenders, title companies and even buyers themselves.

Sharon

Sep 12, 2012 01:25 PM #8
Rainmaker
2,752,423
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

You just reminded me :( Thanks!

 

Love and light,

Laura

Sep 12, 2012 01:46 PM #9
Rainmaker
528,731
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa
You are absolutely right! We need to give lenders and title companies time to do their part of the transaction. It is unrealistic to expect otherwise. You can always move the date up if things move along smoother than expected. Better to give extra time and not need it than to start a chain of unfortunate events!
Sep 12, 2012 02:10 PM #10
Rainmaker
375,516
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Yeah, you've nailed a very common problem.   But is it my imagination that portfolio lenders with inhouse underwriting are faster than mortgage brokers when the borrower is obtaining 80% LTV conventional financing?

Sep 12, 2012 04:06 PM #11
Rainmaker
4,797,120
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Gene, very true and this is an issue in many contracts today.  Something we all need to be aware of.

Sep 12, 2012 08:43 PM #12
Rainer
439,405
Barbara Tattersall
Keller Williams Realty Metropolitan (Keene,NH) - Keene, NH
GRI

Good Morning Gene,

We are grateful for the uptick in business but with that comes all the details multiplied.  Our appraisers are now 2 and 3 weeks out where an appraisal used to be back in a week. Inspectors are out straight and more buyers are adding septic inspections to the process.  And on top of that the lending requirements!  Better to have too much leeway and close early. Continuous extensions create anxiety and those fires.

Sep 12, 2012 09:01 PM #13
Rainmaker
2,346,102
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

Not something I'm too familiar with, but basically what I'm hearing is "be realistic".................

Sep 12, 2012 09:32 PM #14
Rainer
278,100
Kathryn Maguire
GreatNorfolkHomes.com (757) 560-0881 - Chesapeake, VA
Serving Chesapeake, Norfolk, VA Beach

I had this happen with one of my listings.  The buyer wanted a 26 day closing because their house was under contract and that was all the time they had to move out. The agent told me that they did not have money for temporary lodging after their house sold and they needed to move NOW!!!!  My seller had five children.  There was no way they could meet that dealine (much less the buyer's lender!)  I thought that this was gross incompetence on the part of their agent who told me that she counselled her clients that they HAD to accept the agressive closing date for their house. It started a domino effect that was going to result in pain for her client.

Sep 12, 2012 10:23 PM #15
Rainmaker
150,046
Michael J. Gallo
Florida Luxury Realty - New Port Richey, FL
Florida Luxury Realty - Gulf Home Sales Team

Gene, I worked for years with a Mortgage Broker.  Somehow some agents were informed that all Brokers have a magic wand to get files funded at will.  :)   I always ask how long the lender needs to fund the sale at the time I ask for the pre-approval letter.  If the contract comes in Financed with a closing date less than 35 days out I check with the L.O. to see if it will fly.

Sep 12, 2012 11:45 PM #16
Rainmaker
1,224,535
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

To All:  Every comment I read above just proves to be once again ... so clearly ... that ActiveRain has agent members that are above and beyond the norm.  I want to work with you ALL!  You "get it" ... not only regarding Closing Dates, but  marketing, your businesses, how to "play" with others, and so much more.  AR truly is representative of the best in the field!  And I so applaud your working in partnership with your lenders.  Seeking their input prior to contract is so wise and valuable.  It eliminates as many "fires" as possible when heading into processing.

Thanks for each of your comments ... I'll respond to each one as quickly as possible.   Have an appointment, then will be back ...

Gene

Sep 13, 2012 12:25 AM #17
Ambassador
664,458
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Gene: Great metaphor. If only our job was so easy!

Sep 13, 2012 02:22 AM #18
Rainmaker
1,315,908
Nick T Pappas
Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Hun... - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Gene, glad to see this was featured so more will see it.  I routinely ask for 45 days for the very reasons you point out.  

There's nothing more frustrating than someone telling you "Yes, we can get it done" and then when it comes down to the wire suddenly all sorts of reasons pop up why it can't be done...on time.

Sep 13, 2012 06:15 AM #19
Rainmaker
1,560,481
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Hmmmmm . . . does this have anything to do with my post about the lender my client picked?  Funny thing about that tale was that loan docs were all set to GO OUT . . . until, the lender realized that he didn't have something the underwriters requested . . . and he knew they would because he's been doing this long enough.  There is a balancing act when dealing with realtor, lender, buyer, seller, escrow, title -- time frames etc.  And the balancing act gets disrupted when someone drops the ball, then pretends it's not them.

Sep 13, 2012 07:35 AM #20
Rainmaker
1,224,535
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Nancy:  Exactly right.  There's enough issues that seem to pop-up.  Why not try to avoid as many as possible, if possible?

Jane:  I think what you're doing is extremely wise.  I hope you continue to follow this procedure.  And 17 days??  Wow!

Margaret:  Definitely ISN'T a quick close then ... as asking for extensions is not an easy thing to do.  For anybody.

Joan:  Any help you can extend as to the education of all is greatly appreciated.  And probably secures the success of your transaction, as well ...

Donald:  You're right ... a rare file can glide through the system on occassion.  But best to assume that is not the case and touch base with the lender first ... and thank you for the kind words!

Understood, Sharon!  Rather like a duck in a shooting gallery at times!  Closing Dates are a real source of tension these days ...

I'm glad I helped, Laura!

Karen:  Yes ... the better safe than sorry mode of thinking is good in these cases.  Typically, dates are more easily  moved up, than back ...

Inhouse underwriting helps immensely ... cuts down tremendously on lost time between communications for sure.  That may explain some of what you are seeing and experiencing, Lloyd.

Definitely, Gabe ... ALL is right.  Every professional involved in the file should be aware ...

Keller Williams:   It's the old "Good News - Bad News" thing.  More business for all to do ... but from what I see, hiring still hasn't picked-up much.  So same number of people trying to handle more work ...

Roger:  Hard thing to do ... being realistic.  Especially when the pressure is on ... understandable that is happens.  Not liking it tho ...

Gene

 

 

Sep 13, 2012 07:36 AM #21
Rainmaker
1,224,535
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Kathryn:  I believe you're spot on ... people sometimes forget that the file in front of them translates to a real person and their lives.  How could you overlook or forget that someone was pregnant?  Believe me, I understand "things" happen ... but this would be one instance where a rush would definitely be called for.  Hope mom and baby were fine ...

Michael:  I hear ya!  There are those times where you truly wish you DID have a magic wand.  But underwriters and staff are getting worn out with all the rushes and extensions and pressure.  You just can't go "to the well" too often.  People get numb.  It's best to plan ahead and write dates realistically ...

Paul:  We keep trying, my friend ... and doing our best ...

Nick:  I understand both sides.  You can look at a file that has all the appearances of "no problems".  Then for some reason the underwriters finds one .. or more that is a problem that you've never encountered before.  I'll say this for them ... they're creative!  To play it safe, asking for 45 to 60 days is wise.  Hopefully there is plenty of time to face and put-out any fires that erupt ...

Carla:  No!  No reaction to your post ... but will now have to hop over there to read and catch-up.  Then comment.  Sounds interesting, to say the least ...

Gene

Sep 13, 2012 08:10 AM #22
Rainmaker
1,026,935
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

Excellent advice, although we are still routinely closing in 30 days in my neck of the woods...I do advise my buyer clients, though, to not only be preapproved but to have their docs in to their lender BEFORE we even start looking at property.  It is definitely not like it used to be. 

Sep 15, 2012 01:35 AM #23
Rainmaker
1,224,535
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Susan:  Sounds like good judgement to me ... and playing it safe makes sense, esp. in these challenging days.  Glad to hear that your region is not seeing the same backlog as mine.  Enjoy!

Gene

Sep 15, 2012 10:45 AM #24
Ambassador
1,508,812
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

All of this is MOST EXCELLENT advice!  I love when contracts state a 30 day close for FHA and when I call the buyer's agent to the carpet on this on one of my listings they swear up and down it can close in 90 days.  Another problem I have is VA closing costs.  Agents are not writing in the non-allowable buyer paid costs to be paid for by the seller!

It is always a good idea to have an LO in your pocket as an agent  or buyer to work with when writing a contract - especially a GOOD one like Gene Mundt!

Sep 17, 2012 12:28 AM #25
Rainmaker
1,224,535
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Thank you, Renee!  Your kind words are very appreciated.  And you're right.  If you have a good working relationship with a lender, why not use the insight and info they can provide you?  Obviously, the opposite is true too.  It's exactly what makes the relationship so good and strong.  Respect and the advocacy for each that come as a result.  Exactly the relationship I always look for.  Would LOVE to have continued opportunities to work with you, Renee ...

Gene

Sep 17, 2012 01:58 AM #26
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Rainmaker
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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