Home Selling in Encino>Question Details

wendy, Both Buyer and Seller in Simi Valley, CA

Loan Contingencies

Asked by wendy, Simi Valley, CA Thu Feb 12, 2009

The buyers of my house were supposed to remove the loan contingency on Monday 2/8/09. Today is Thursday 2/12/09 and still no removal and no word from the buyers broker as to when this will be done. What is going on? Does this typically mean that the buyer isn't qualifying for the loan that they were suppose to quality for?

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6
Wendy:

With all due respect to Bill, it's never that cut and dried. Technically you are out of contract: in reality and practically speaking, this happens all the time. Flexibility is usually tolerated in a contract because there are so many moving parts, we are dealing with complex issues and with people’s lives.

It sounds like your agent has been actively communicating with the other side and is proactively working on this. It also sounds like the buyers have been communicating as well – everyone appears to understand what the issue is and are apparently actively working on it. In the current market, although I don’t agree with a buyer changing lenders in the middle of a contract, I certainly understand the desire to get a lower rate AND … it happens all the time.

If this were my transaction, I’d issue an addendum extending the contingency time periods. That way, the buyer has a bit more time to find another loan and the deal is technically still active. Since you don’t have a backup offer, and don’t want to “force” the buyer to perform because of the risk of losing them, an extension is the best way to go.

.
Web Reference: http://www.carlmedford.com
0 votes Thank Flag Link Fri Feb 13, 2009
Wendy,

Where is your agent in all of this? If your contract calls for contingencies to be satisfied by a specific date and they are not......you are out of contract.

Someone should have been communicating with the buyers to miniimize a problem of this nature.
0 votes Thank Flag Link Fri Feb 13, 2009
Dont kink the deal with bad energy. Let it happen . . .if it were meant to be it will! No worrys Okay?
0 votes Thank Flag Link Thu Feb 12, 2009
Thank you for the answers. It's actually my parent's house that is in escrow. Our brokers and the buyer's brokers are in constant communication with each other. The buyer's broker is saying that the original loan they wanted to get is a bit higher % than what they wanted so they're looking for another lender. There are no other offers or interest in our home so we are not going to send them a "notice to perform." The house is still technically on the market and is still listed in the MLS.

We are so grateful that the house has "sold" in this economy and just pray that this goes through. The house is listed at $850k

Just VERY concerned and nervous.
0 votes Thank Flag Link Thu Feb 12, 2009
Wendy:

It could mean anything INCLUDING the fact that they may be having troubles with their loan. Your agent needs to ask some VERY direct questions of the other side to find out exactly what is happening.

An unfortunate aspect of the current market is that some buyer’s agents don’t remove the contingencies until they are forced to. Some don’t remove them at all. They know that if you really want to sell your home, there is not much you can do in the current market. At times, sellers get left hanging on tender hooks until the very end, not knowing for sure if it will close or not.

Sad but true. Hope it’s not the case for you.

If your home is very marketable or if you had back-up offers, you might have your agent consider a Buyer 24 Hour Notice To Perform. If you DON’T have any leverage, then you may just have to wait it out.

.
Web Reference: http://www.carlmedford.com
0 votes Thank Flag Link Thu Feb 12, 2009
Not enough info to tell. It is not uncommon today for loans to take longer than normal. Your agent should be in contact with the buyer's lender to determine what is going on. If needed your agent should send them a notice to perform.


-Richard
310-482-0173
0 votes Thank Flag Link Thu Feb 12, 2009
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