It’s another sign of the times. Buyers are leaving the loan contingency in the accepted offer until close of escrow. In other words; up until the day the loan funds, the buyer can back out of the transaction based on a lender that does not perform. The reason for this is the uncertainly of some lenders in the market, but also bcause lenders are re-qualifing buyers at the last minute as well as requesting review appraisal just before they release the loan funds to close.
I have an accepted offer on a listing in Pleasant Hill California that has all contingencies removed except the loan contingency. The buyer is a friend and collegue of mine in the same Walnut Creek Coldwell Banker office. I advised my sellers to accept her offer because she is putting a seizable amount of her ouwn funds into the transaction and we know that the lender, Nannette Voluntine from Priceton Capital Morgtgage has a track record of performing. This is another way that buyers are protecting themselves in a real estate market that is going through change.
It is very inportant the agents, buyers and sellers communicate their wants and needs in this market. Real estate deals are lost because of a lack of communication and understanding. The Walnut Creek, Pleasant Hill markets still have a lot of inventory and present a good opporuntity for buyers.
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Hi Sam–you make a good point about the importance of both buyers and sellers keeping the big picture in mind and adapting to current market realities. It is prudent for the buyer in this case to leave that loan contingency in place, and wise of the listing agent and seller to place it in perspective as a necessary step to getting the deal done. Many deals close shortly after formal loan approval and inspection contingency timeframes have passed, so the potential negative impact on the seller if the deal falls through would be minimized.
Pam,
In many parts of the US, contingencies are in place until Close of Escrow. This market has sent us all back to basics.
Regards,
What a great resource!