I am currently involved in a purchase transaction. We made an offer contingent on getting a mortgage. Theseller accepted. We had a pre-approval letter so basically we are waiting for the appraisal. Yesterday, the seller’s agent contacted my mortgage broker asking for a letter confirming that there would be no problems at the closing. The seller’s broker did not contact me or my agent. The due date for the appraisal is still two weeks away. The closing is a month away. I was a little shocked that channels of communication appeared to be by-passed. Is this standard procedure?
JS
I do not know real estate law in CT (disclaimer).
In CA there we customarily require a letter of pre-approval from a lender. The letter is supposed to state that the buyer is qualified to purchase the property only subject to the property appraising for the purchase price, clear title is established, and no material changes to the buyer's financial situation.
In the purchase contract there is a default period (subject to change) of 17 days for the buyer to remove all contingencies, including the loan approval and appraisal. When I represent the buyer in a transaction I make it a point to communicate with the listing agent regarding my timetable for removing those contingencies. IOW, I do not want the L/A to be wondering how we are progressing, I want to be the one initiating the communication.
When I represent the seller as the L/A I make it a point to inform the buyer's agent during the offer negotiation that I am going to be expecting regular communication regarding the buyer's progress on loan approval. I want to be notified when the appraisal is going to be done, see if the appraiser needs help. I will ask permission of the buyer's agent to contact the buyer's lender to confirm the buyer's qualification. In some instances I will suggest to the seller that we counter into the offer that the buyer co-app with a lender that i know and trust.
Generally I would not contact the lender directly but I do not see any reason why contacting the lender would be an issue. Your concern might be better directed at your agent - how are they communicating with the selling side?
The listing agent is not out of line. She can ask anyone she wants about anything. But, who answered her; and what did they say?
If your lender said nothing before contacting you, it's a non issue. The lender CAN NOT remove your contingency, so no worries there.
JS, Where I am the seller's agent can talk to anyone and call anyone directly. The selling agent would not be doing their job IMO without talking to the mortgage broker themselves.
JS. This selling agent was out of line. Communications should have gone from the selling agent through your agent. The selling agent was not entitled to this information unless you have given approval. Privacy laws will protect you as the financial institution cannot give out this information without your approval. You should talk with your agent to make sure that you are still in compliance with your contract dates. The other agent may be looking for your mortgage commitment letter which is separate from a pre-approval letter. Your contract should have a date for receipt of this commitment.
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