Can the lender be held liable if the closing date is not met due to their delay in getting the appraisal?

Asked by Buynow, 32539 Sat Aug 8, 2009

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Murray Balkc…, Agent, Santa Rosa Beach, FL
Tue Jan 26, 2010
Your question is a legal question, and without a license to practice law, Realtors shouldn't give any legal advice. Consult an attorney. Common sense brings up questions like:
- What damage did you suffer?
- In what way was the lender negligent?
- Did the lender ask for the appraisal in a timely manner?
- Did the lender receive the appraisal in a timely manner?
- How much time was given in the contract for the lender to process this file?
- Did the person who wrote your contract include contingencies regarding the lending/appraisal, and the need for possible extensions?
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Mack McCoy, Agent, Seattle, WA
Mon Jan 25, 2010
See Joseph Jones, below. Hint: you already know the answer.
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Karen Butler, Agent, Fort Walton Beach, FL
Mon Jan 25, 2010
Most often, the reason there is a delay in ordering the appraisal is because the lender hasn't received needed documents. For example, verification of employment; and old divorce decree and the number one reason there is a delay is they don't have verification of insurance. I always caution my buyers to have homeowner insurance within 5 days of contract. That way there is no delay. There are people in the real estate process that are there to protect buyers from lots of angles, so when people show up at the 11th hour with paperwork, they put the lenders in the position of trying to jump through hoops at the last minute.

New regulations are in place now, that require certain deadlines be met, so if all the paperwork is not in and on time, then there will be a delay. If you work closely with your Realtor and Lender, these things can be avoided. Additionally, in new construction, a CO (certificate of occupance) must be received before the lender will order the appraisal. But if it was their fault, they will normally extend your lock in rate to cover the extension.

Karen Butler, Coldwell Banker United Realtors, FWB, Fl 850-830-8780
Military & Relocation Specialist 1st Time Home Buyer/Seller 20 Years - USAF Retired
2009 Fair Housing Chairman, ECAR Contract Negotiation Specialist, CNS
Senior Real Estate Specialist, SRES Accredited Buyer Specialist, ABR

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Joseph P. Jo…, , Huntington, WV
Thu Sep 10, 2009
No. When purchasing a home, there are many professionals that are involved in the process. Recently, the government has instilled various procedures that can actually slow down the appraisal process, such as appraisal management companies. many bankers, brokers and lenders are not even legally allowed to speak with the appraisers any longer, to avoid any possibility of manipulation of the appraisers opinion. There are many things that can be done to ensure that the loan process runs smoothly. You can always extend a rate lock, sometimes at a cost, sometimes not. Contracts can most of the time be extended. The bottom line is, with so many people being involved in the process, it's impossible to guarantee a closing date. Any lender that does is risking their reputation and possibly putting the borrower in a bad position. It's important to be up front and honest with all parties involved to ensure a comfortable closing for everyone.
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