Home Selling in Boston>Question Details

xdamotax, Home Buyer in Canton, MA

what should I do if buyer is always requesting extension the day before the commitment due date? I agree for the 2nd or 3rd time, they lose deposit?

Asked by xdamotax, Canton, MA Tue Jul 23, 2013

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Hi,

The buyer sometimes has no control of how fast the lender operates. Sometimes certain deals take longer than other to provide a commitment letter. If the buyer attached a Commitment contingency with the offer than the seller has to give the deposit back if the seller wants to back out of the deal. The best thing to do is to have a real estate lawyer look at the offer and at any other contingencies that were provided with it.
0 votes Thank Flag Link Wed Jan 8, 2014
This may actually be outside of the buyer's control and lay at the feet of the lender. This question was asked in Summer 2013 when the market was very active. Banks now have a lot more reviews, requests for more information, secondary appraisals etc that can slow the process. The seller usually has the option to withdraw from the deal at each time an extension is requested - it depends on the contract and the terms of the previous extensions (which, hopefully, were in writing). Many of these responses make statements about losing their deposit - it is NOT that easy because BOTH parties are required to agree to the terms of the of release the deposit . It could require court action.

I think this question emphasizes the importance of quality communications between all parties in the process. Real estate should be conversational and not confrontational and issues are much more easily resolved when all parties have been actively conversing throughout all stages of the deal.
0 votes Thank Flag Link Tue Jan 7, 2014
It is in the domain of the attorney and the Seller as regards the treatment of the deposit, but all should be aware of the level of detail and materials, documentation and number of levels of underwriting and approval these days....Often the buyer is frantically and earnestly wanting to move things forward but is completely reliant on their lender......in my book up to 5-7 business days in addition is sometimes simply what is needed to clear the loan.
0 votes Thank Flag Link Mon Jan 6, 2014
I would lean on your attorney for advise here. If you have given multiple extensions you may need to consider giving them a final date but this time in writing and if they can't meet it, unwind the deal. You need to make sure the last extension you gave was done formally (a question for your attorney) otherwise you may not be entitled to the deposit.

Good luck and keep us posted!

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0 votes Thank Flag Link Fri Jul 26, 2013
Normally if you're working with attorneys, if you reject the extension, they normally word it so that the contract is terminated and you have to return their deposit. As others have said, find out why they keep asking for extensions, it's somewhat common these days. If it's a mortgage broker, sometimes there's issues with the property and they need to find another lender. If you reject their extension and put it back on the market, you may end up getting less than you originally got as people want to know why a property is back on market. Most of the time sellers just agree to the extension because in theory they will still close earlier than if they have to start from the beginning again.
0 votes Thank Flag Link Tue Jul 23, 2013
I had the same thing happen to me once. Maybe, buyer is having issues securing a loan.
Our seller stuck with us, and the deal was completed successfully.
Please consult your counsel for what to do in your situation.
kind regards,
0 votes Thank Flag Link Tue Jul 23, 2013
Thanks Joyce. I forgot to mention to call your attorney.
0 votes Thank Flag Link Tue Jul 23, 2013
Although mortgage commitment extensions are fairly common, you must determine why is it being requested. Why does the lender need more time? Did the appraisal get delayed? and consequently there was a delay in the underwriting process? Is the buyer in need of finding a different lender after discovering that he/she has been refused by the original lender? Your attorney can help find out some answers. It is possible that the buyers could lose their deposit, but it's best to discuss with your attorney.
0 votes Thank Flag Link Tue Jul 23, 2013
Talking to agent and council is your best answer for advice.

FInd out the reason for delay.
0 votes Thank Flag Link Tue Jul 23, 2013
Have your agent talk with their lender and get the skinny on the reason for the extension if possible. Lenders are requiring more and more these days and extensions can be common.
0 votes Thank Flag Link Tue Jul 23, 2013
Speak to your Listing Agent and your Attorney as Richard suggested.

No one here can give you the answer.

Sometimes there are perfectly good reasons for an Extension...

j
0 votes Thank Flag Link Tue Jul 23, 2013
Speak to your attorney. Lenders are crazy theses days so multiple extensions are common.
0 votes Thank Flag Link Tue Jul 23, 2013
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