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How much time does it take to close a transaction when the buyer has a USDA Gov Loan

By
Real Estate Agent with RE/MAX Advantage

I submitted an offer a month ago to my seller with the financing terms marked rural development, no big deal. I called the buyers agent and cleared a few things up and advised my seller to take the offer it was 2000.00 below asking price including all allowances, and a pre qualified buyer.

Well the loan wasn't exactly the usual RD it was actually a USDA government loan through our local dept of Agriculture. The buyers agent seemed pretty uneducated as to how it worked and I have never done one.

 Paper work was submitted to the local office, contracts, permits etc one month ago. I followed up periodically and when the appraisal was submitted last week I called the person in charge at the dept of Agriculture and asked her if the appraisal came out ok she assured me it did so I asked if we were on target to close the following week as stated in the contract. She laughed out loud and said noooo! It will be at least an additional 30 days?????

So on Monday of the following week I phoned her again and she said she had to order title work! I almost passed out, are you kidding me? order title work on Monday and we close Wednesday? You've had this on your desk for a month and your ordering title work today? No she said I don't know if I have time today, I'm swamped. Title work by the way has been done for two weeks but she has to order it on her forms from the title company which is practically across the street to submit for funding.

So she has funds approved and available, title work is done, appraisal done and she wants a 30 day extension on our real estate contract????

She assured me this process has actually been one of her smoothest and quickest cases. My question was this.... When I submitted the contract with a 30 day closing why did you not tell me or the other agent that there was no way we could close in that amount of time. She never once voiced this to anyone until 3 business days prior to closing and only because of my prodding! So to sum it up the buyers lease is up on his apt and he has to be out and he has no house to move into and he is livid that nobody told him this until the last minute as he should be!

Anyway, if you ever get an offer with an RD loan not through a bank make sure you find out up front a time frame! They don't think what we put on the contract is important I guess.

 

Robert Smith
Byron Bank - Grand Rapids, MI

Jennifer,

This may not be a function of RD, as much as it is the institutuion (or loan officer) that you are working with.  Many times, an inexperienced LO will blame it on the "program" when it is more due to their lack of knowledge on the proper steps of what must be taken on that particular program (but to be fair, some programs do take longer, particularly with the more stringent underwrting guidelines that are in place).  More often than not, its the company or the LO.

Robert Smith, City Federal Mortgage

May 28, 2008 11:59 AM
Barbara S. Duncan
RE/MAX Advantage - Searcy, AR
GRI, e-PRO, Executive Broker, Searcy AR

Jennifer, I don't understand what type loan this was.  Was it the USDA Direct type loan?

May 28, 2008 12:01 PM
Anonymous
Cindy Davidson

I have closed only one loan of this type however the entire transaction was smooth and only took about 2 weeks extra to close because of the government inspector.  The loan officer representing the program was great and on top of all the details plus he attended closing.  I am sure it depend on the loan officer assigned to the buyer.  Good luck.

May 28, 2008 12:02 PM
#3
Jennifer Davis
RE/MAX Advantage - Searcy, AR

Thanks for comments everyone.

Barbara, The loan is direct with the government no bank loan officer is involved. I have never been involved with one of these before. The person in charge works at the dept of Agriculture and she seemes to be it. I actually talked to Rob about it today and he has never heard of or delt with them either!

These are directely funded by the government and sometimes there are no funds available, luckily in this case it did get funded! At least the representative said we should feel lucky???!!

May 28, 2008 12:16 PM
Jennifer Davis
RE/MAX Advantage - Searcy, AR

Robert, is there a difference when there is no bank involved?

May 28, 2008 12:18 PM
Robert Smith
Byron Bank - Grand Rapids, MI

It might.  I have never heard of one in our area going directly thru the dept. of Agriculture.  Still seems too lengthy, though.

May 29, 2008 01:03 AM
Mary PAUL, ABR, CRS,GRI, e-PRO,
RE/MAX Advantage Realtors, Searcy, AR - Searcy, AR

Jennifer,

I think the person in charge was on a power trip, not caring about other people's feelings.  She gets her hourly wage regardless and she has no knowledge of real estate. 

May 29, 2008 04:46 AM
Kevin McGourty
Realty ONE Group - Phoenix, AZ

Sorry for the frustration, but I enjoyed your blog -- with personality.

May 29, 2008 06:12 AM
Jennifer Davis
RE/MAX Advantage - Searcy, AR

Thanks Robert.

Mary that is exactly right!

And Kevin.......OF COURSE!

May 29, 2008 01:07 PM