Our buyer's lender refuses to update the buyer or our realtor on why we keep needing extensions with no closing date in sight. What can the?

Asked by Jennboree, Fort Worth, TX Tue Mar 8, 2011

seller do? The buyer moved in last Dec, putting $500 in earnest money and requested 45 days to close. The 45 days came up with nary a peep from the buyer's lender and the buyer requested an extension. That extension passed, 3 days later and yet another extension was signed, along with $1000 more earnest money. Now we are nearly to the end of that 30 day extension and the lender is still not responding to anyone's request for updates on the loan. We aren't even sure if the buyer is approved at this point because we get absolutely nothing from the lender when we ask! As sellers, what can we do? Or do we just have to wait for the extension to run out and end the deal with the buyer, starting all over again?

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Lucy Puniwai, Agent, Haslet, TX
Tue Mar 8, 2011

In the contract - how did the Buyer's agent write the offer? Specifically, what are the "finance requirements"?
What dates are in the contract? On the Seller Financing Addendum - what dates are in Paragraph A & B?

What you have here is someone living in your home who is not paying to live there. All earnest monies are to be retained by the Seller is Buyer cannot qualify.

The Buyer's Agent knows what the Buyer's position is. He/She must execute a Buyer Termination of Offer if the contents of the Offer which is an Executed Contract - no more extensions. If you near the end of the 30 day extension - have your Realtor execute the 7 day move out notice and termination of contract.

Since Realtors are prohibited from giving legal advice, I recommend you inform the Title Company where you agreed to close of this problem (or your Realtor should make this call) and seek legal advice from the Attorney that would be getting paid to clear the Title on your home. They are usually very helpful because they know you will eventually use them to close on your property.

Very good luck and I would love to hear how this problem is resolved.

Lucy A. Puniwai
(214)783-6416 - Cell
(682-224-8050 - Fax
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Tue Mar 8, 2011
Wow - you have a mess. In real estate one thing we learn early on is to never allow preoccupancy, this is a PERFECT reason why. Once in, they are hard to get out too.

Normally a 30 day extension is all that is needed, you should be visiting your attorney to get some strong wording going to the buyers to move it or loose it. Your agent should be able to find out, from the other agent working with the buyer, what is going on. At least they are giving you earnest money but you deserve some answers. Sometimes the paperwork just piles up at the underwriters desk and no amount of questions can answer the question when it will be looked at. I have run into that one a lot and you just have to wait, but 75 days is pushing it a lot.
1 vote
Debbie Scri…, Agent, Weatherford, TX
Tue Jun 14, 2011
Get tough.....they are wasting your valuable marketing time. And when home prices are not going up (which they aren't ) you are losing money every day that home is off the market. Has the appraisal been done ? That would give you a clue as to whether they are moving on the deal.
Otherwise see an attorney if you don't understand your next move.
Get them out of the house, terminate and move on. If they still want the house and can get the loan they will hop on it and get it done.
I had a prospective buyer call me last week about a home I have listed. When I asked him about his financing he told me he had a pre approval through an internet lender but had to save the down payment. The .com (INTERNET) lender told him to go ahead and get a house under contract and then the lender could stall the closing until he had time to save his down payment and closing costs !!
Buyers on my listings can use any lender they want but I suggest to my sellers to require all buyers to get pre approved with a select few lenders I know and trust to do the right thing.
Web Reference:  http://debbiescrimshire.com
0 votes
Dianne Hicks, Agent, Rancho Bernardo, CA
Thu Mar 10, 2011
I think it really comes down to what do you want to do when the extension runs out. If they want another extension then make the answers cystal clear before signing. I agree with others,,, don't let anyone move in till it closes because these are the situations that can get sticky so best to avoid.

I hope it closes for you.... Good Luck!!!

Kindest Regards,
Dianne Hicks
HomeSmart Real Estate
0 votes
Darrell Self, Agent, Allen, TX
Thu Mar 10, 2011
This is a very tough situation. You should never allow anyone to take possession prior to closing and funding of the transaction. The buyers lender does not have any requirement to respond to the seller you have to push the buyers agent to get answers. You should request that the buyer move on to another lender as it sounds like the lender may be the issue. You should also consider speaking with a Real Estate attorney in case the transaction should not close and get legal advice on how to proceed.
Web Reference:  http://dmdrealtydfw.com
0 votes
Lucy Puniwai, Agent, Haslet, TX
Tue Mar 8, 2011
Good for you! Results! Thanks so much for the update! Heads up - Lender's must be approved to do business in Texas. I guess your family has had success in the business and your Agent knows what is going on. That is great info! I wish you all the best and once again, thank you SO MUCH for letting us know the outcome!


ps If you received any informative information from me, feel free to click the "Best Answer" or "Like" button as I work hard to help people on this site. Mahalo!
0 votes
Jennboree, Home Seller, Fort Worth, TX
Tue Mar 8, 2011
We have a very reputable agent and she approved idea of the buyer moving in (and paying rent/utilities) for the initial 45 days it was supposed to take the loan to close (first-time buyer had to move from where she was ASAP). She has continued to pay rent and utilities. No, we shouldn't have done it though even my parents had allowed buyers to move in before closing and they own 15 properties so it didn't seem TOO crazy of an idea.

My husband is going to refer to the Title Company's attorney on how to proceed (even the title company can't get in touch with the lender). We've found out that the buyer is friends with the lender who is based out-of-state and has a very poor rating with the BBB. At this point, we are sticking with the original contract's terms, no more extensions granted. The buyer is providing nothing other than "we'll close by the end of March" which we don't have any reason to believe is true. Tough lessons to learn but we aren't out any money which is great. End of month, buyer will have to be gone and we'll start over...and get it right. Thanks, everyone!
0 votes
Lucy Puniwai, Agent, Haslet, TX
Tue Mar 8, 2011
Guys -
The problem is the Seller's Agent cannot get any updates from the Buyer's Lender. The Buyer moved in December 2010. That is over 60 days. The problem is not whether or not the Lender is performing, the issue here is the Buyer's not performing as per the "time is of the essence" clause. It sounds like this Buyer just cannot qualify period. What's done is done. Jenn needs to apply the contents of the existing Executed Contract. Get them out and NEVER allow anyone to move until "closing and funding".

Lucy A. Puniwai
(214)783-6416 - Cell
(682-224-8050 - Fax

0 votes
Bruce Lynn, Agent, Coppell, TX
Tue Mar 8, 2011
Change lenders.....
Your realtors should know a great lender that will close on time and keep you updated.
Get another extension and require that the buyer use your lender.
Of course they won't want to do it in many cases, but if they are serious about buying your house,
they will.
I've done it a couple of times and worked for me.

Web Reference:  http://www.teamlynn.com
0 votes
Dallas Texas, Agent, Dallas, TN
Tue Mar 8, 2011
Buyer moved into the property ? On believe they could purchase the home.

Much depends on executed sales agreement what can or can't be done .

Your lising agent can handle this HOWEVER most lenders take approx. 45 - 60 days. However many at last moment may pull the plug state buyer is not qualified to purchase the property.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes
Elliott R. O…, Agent, McLean, VA
Tue Mar 8, 2011
Your buyer needs to find another lender NOW to get some answers and to salvage this deal. I cannot stress enough why the pre-approval process is so important and this is another example of why realtors and buyers need to know what to look out for.

The lack of communication is completely unacceptable. It's 2011 and if the lender can't respond to your client via a phone call, email, text. etc., then they don't need to be in the business. There are plenty of good lenders out there that would be more than happy to take care of your client and offer them the service BOTH of you deserve.

I would also try to contact the loan officer's manager as well and try to get some answers but at this point it probably will not make much of a difference. Find another lender that knows how to get loan closed and can answer a phone call.

By the way, are there any issues with the property? Any repairs needed? Has the property been appraised yet?
What type of financing was your client seeking?

Please share some details so we can give you a little more guidance.

Elliott R. Oliva
mortgage banker
Envoy Mortgage
512.825.8309 direct
Se Habla Espano
0 votes
Don Groff, Agent, Austin, TX
Tue Mar 8, 2011
Hindsight is always 20/20 but it is never a good idea to let the buyer occupy the property before settlement. When you get to the end of the current extension you have 2 choices to make. End the purchase offer and evict the buyer and now tenant or insist on more information as to what is causing the delays and have him pay rent for another period of time designated by both parties in which you can hopefully close.

The important thing is to know what is causing the delays. For all you know they could be moving from one lender to another after getting denied. It's a tough situation. Before offering to extend again I would want something in writing from the lender stating that they will be able to close this loan i a reasonable amount of time.

Good luck to you.

Don Groff
REALTOR | Mortgage Broker
Keller Williams Realty | 360 Lending Group
0 votes
Matt Konlande, Mortgage Broker Or Lender, Fort Worth, TX
Tue Mar 8, 2011
I would have your Realtor use all means necessary to make contact with the lender and find out what the hold up is. Is the lender local or out of state?

If the buyer is qualified then they should be able to switch lenders and close in 7 days or less.
Web Reference:  http://www.mattkonlande.com/
0 votes
Tracey Tellor, Agent, Duluth, MN
Tue Mar 8, 2011
You CAN go to a different lender.
0 votes
Phil Rotondo, Agent, Melbourne, FL
Tue Mar 8, 2011
You should contact an attorney immediately. You have a lot of interests to protect; so get one today.
Web Reference:  http://www.321property.com
0 votes
Scott Godzyk, Agent, Manchester, NH
Tue Mar 8, 2011
Alot of red flags such as a sellers agent i would not recomend letting the buyer move in before closing as they now become a tenant with great liability. If you are going to let them in $500 is notyhing, it should be $5000 as a deposit, one that matters and counts and is not so easy to walk away with. Next an extension should never be signed unless you know why the bank needs, what they are goingh to do to solve that problem and how long it will take to solve it. At this point th elisting agent need sto contact the bank direct, if they wont easy go there, hang out in their loby until they come talk to you, it works... if they are using an internet lender or out of town mortgage company, this is a prime reaosn not to.

good luck working things out, the agents need to become more agressive
0 votes
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