This will require the realtor to work more closely with the lender when writing the offer due to the timing of the loan to make sure the 21 days is achievable or the agent will need to go with a longer time. This will include all inspections, appraisal, underwriting, loan docs, etc. The way I read this and understand from Annie in this video, is that the loan funds must be deliverable by the 21 days and closing can be when ever after that 21 days. I think one thing missing is that until the appraisal is in and the loan is clear to close, there is no full approval. There is only conditional approval and that does not seem satisfy the 21 day loan contingency. Also, agents will need to understand that appraisals will be ordered at the acceptance of the PSA by the lender to meet the 21 days. This can cause extra fees to the borrower if the sale cancels due to the inspection failing.
I agree... in both options 2a. or 2b. what happens on day 22 through the closing date if the financing fails at no fault of the buyer? Does the buyer get their earnest money back? Why not just put 75 days in the box to safeguard the buyers earnest money?
This new option is much better for buyers than going without a financing contingency, but in this crazy market I'm not sure it's enough. One other thing to keep in mind is the appraisal may call out conditions, so that needs to be in before the automatic waiver date too. And finally, there are some institutional lenders who will not write such a letter, even with the other contingency option, so you need to check with your lender. If the lender won't do that with either option your buyer is effectively going without a financing contingency.
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This is what Real Estate school should look like, instead of the joke that it currently is. Thank you Annie.
Thank You for clarifying these aspects so clearly.
Wow. This is what real estate school should look like. Instead of the joke that it currently is. Thank you Annie
This will require the realtor to work more closely with the lender when writing the offer due to the timing of the loan to make sure the 21 days is achievable or the agent will need to go with a longer time. This will include all inspections, appraisal, underwriting, loan docs, etc. The way I read this and understand from Annie in this video, is that the loan funds must be deliverable by the 21 days and closing can be when ever after that 21 days. I think one thing missing is that until the appraisal is in and the loan is clear to close, there is no full approval. There is only conditional approval and that does not seem satisfy the 21 day loan contingency. Also, agents will need to understand that appraisals will be ordered at the acceptance of the PSA by the lender to meet the 21 days. This can cause extra fees to the borrower if the sale cancels due to the inspection failing.
I agree... in both options 2a. or 2b. what happens on day 22 through the closing date if the financing fails at no fault of the buyer? Does the buyer get their earnest money back? Why not just put 75 days in the box to safeguard the buyers earnest money?
I LOVE LOVE LOVE the changes.
Thank you!
This new option is much better for buyers than going without a financing contingency, but in this crazy market I'm not sure it's enough.
One other thing to keep in mind is the appraisal may call out conditions, so that needs to be in before the automatic waiver date too.
And finally, there are some institutional lenders who will not write such a letter, even with the other contingency option, so you need to check with your lender. If the lender won't do that with either option your buyer is effectively going without a financing contingency.
Super helpful!