How long do buyers have to provide financing for an accepted offer? I think that it has been too long...

Asked by Pat R., Ontario, CA Thu Jul 3, 2008

Ok so we put in a bid on a house right at asking price to match the bank owned homes price and get some incentives. Well come to find out they accepted an offer the day before ours but the bank/selling realtor told our raltor they don't think the deal will pan out stating it was really "shaky". So its been almost 2 weeks now and were told we have to wait anther week to find out. We heard that the buyers can't get financed or something like that. Why accept an offer with no backing? We have cash down, pre approved ready to sign today which they like and said that when thisdeal falls through they'll accept our offer. How long does it typically take before the buyer is forced to withdraw due to unsuccessful performance? We obviously are still looking and if we find a better home for us well withdraw in the mean time but I really like this house and want it badly, just trying to see what to expect. Although Im telling myself expect nothing being they accepted someone else's offer....

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Diane Wheatl…, Agent, Upland, CA
Thu Jul 3, 2008
You cannot have two "accepted" offers of course you know that. So did your Realtor place your offer in a back-up position for safe keeping, so to speak? In your back up offer you can add verbiage stating how long you are willing to wait for this first offer to be accepted or rejected before you walk. But why would the seller agree to this first offer in the first place if they cannot procure financing? Well if the agent is trying to be diligent to the terms of the contract because the seller did indeed sign the first offer then the buyer typically has 17 days from the date of acceptance to secure financing. If financing is not fully approved or still contains other contingencies then the seller could cut them loose and accept your offer. That is "typical". Contracts are negotiated in all different ways. They could have lengthened the time period for lender approval. We don't know.

It certainly sounds as if it would behoof the seller to find an out with the first buyers and go with you. Unless the first offer give them more $$ in their pocket (no incentives maybe) at the end of the deal. But remember you are at the mercy of a bank and the bank's procedures. That could be a whole other ballgame in iteself.

Keep looking around like you are and maybe something will happen with that deal that saves the day or you find a better home in the near future. Good luck. I understand how frustrating it can be.

P.S. Joan always has great advise too!
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Joan Patters…, Agent, Rancho Cucamonga, CA
Thu Jul 3, 2008

Did you put in a back up offer? I do not understand why the listing agent did not call the bank first to see if these buyers really were pre-qualified etc. I always call the banks and talk to the lender about what program a buyer has and ask their FICO scores etc. If the buyers cannot get financed then typically, it all depends on how long the bank gave them to remove their contingencies. Typically, it is 17 days to remove contingencies after escrow has been opened. The contingencies would include, appraisal, loan approval and inspections. So, it sounds like the bank gave these buyers a full 17 days. I would ask your realtor to talk to the listing agent and find out how long their contingency period was for. These buyers could be trying to obtain financing from another lender, so since the bank accepted their offer, they need to give them the chance to see if things can work out.
I know it is frustrating, but hopefully it will work out for you. Maybe you will end up getting this house after all if they cannot obtain financing! Then it really was meant to be!

Kind regards,

Joan Patterson, B.A., A.S.P., G.R.I., Realtor
Keller Williams Realty
8250 White Oak Avenue, Ste 102
Rancho Cucamonga, CA 91730
2 votes
Diane Wheatl…, Agent, Upland, CA
Thu Jul 3, 2008
I am so happy to be able to contribute towards the answer of your question. I will keep my fingers and "toes" crossed for you too! Have a great holiday weekend. We are always around if you need more advise or have a question. Good luck!!
1 vote
Pat R., Home Buyer, Ontario, CA
Thu Jul 3, 2008
Thanks everyone, I appreciate all the feedback! Yes I guess how it was explained to me is when ever this buyer dops out they have our offer next in line and said theyll accept it right from there. I too questioned why a bank would accept a shaky offer Diane and my belief is they had the highest bid at the time, and we were a day late with the higher bid (my asumption).

Meanwhile were still looking, kind of have this house on the back burner but secretly I've got my toes crossed. If its meant to be its meant to be I suppose, We've done everything we possibly could to try and get this house even though we were a day late but when we looked at it a couple days before we weren't prepared to jump 20G above the budget we personally set at 300. Thank you all so much and I hope it works out, I guess well see next week! Happy houses to you all!
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Lisa Cartola…, Agent, Oakland, CA
Thu Jul 3, 2008
Hi Pat,

If the buyer who put in the offer before you did used the standard time frame in the contract for the loan and appraisal contingencies, then they will have 17 days. I have seen many buyers have problems with lenders of late. A buyer may have been pre-approved but the lender changes guidelines mid-way through and then the buyer may have trouble qualifying under the new guidelines. There was an instance in my office where the buyers were going to the title company to sign loan documents and the lender backed out at the last minute. The mortgage broker and/or bank being used can have a significant impact on the buyers ability to perform. Using a reputable mortgage broker/bank can help alleviate these issues.

That being said, the listing agent may be right that the other buyers may have a hard time performing.

REO properties can be frustrating for buyers, but if you are willing to be patient and have your Realtor keep in constant contact with the listing agent, it could be very well that you will be able to have your offer accepted.

I would suggest talking with your Realtor to see what kind of details they are able to get from the listing agent.

Good luck!

Lisa Cartolano
Alain Pinel Realtors
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