Hi,

I'm a new agent in Missouri and just wrote my first contract to sell a home. The buyer was pre-approved and was told there was no problem with getting financed. We wrote the contract on May 24th. Originally the buyer was going with FHA but then with advise from her mortgage broker, we ammended the contract to conventinal. The contract was written based on financing,appraisal and inspections. With the buyers consent I provided the mortgage companies name, phone number.

It wasn't 3 days later that I received a phone call that the sellers agent had called the buyers mortgage broker and got into a confrontation over the phone regarding the buyers ability to obtain financing. The sellers agent even suggested a specific lender that the buyer should go through.
She has done nothing but continue to suggest that the reason the loan approval letter hasn't been provided within the 15 days on the original contract is because they have bad credit. Believe me, this is not the case.

The buyer has opened escrow with "earnest money" deposited, has paid upfront for an appraisal on the home and arranged for fire insurance on the property.

I'm getting calls daily from the sellers agent wanting to know if I have loan approval yet. The mortgage company is telling me that they won't give a loan committment until they know that the property appraises correctly, insurance is secured, and buyers credit is verified a final time.

We set closing for July 5th. Can the sellers cancel our contract since we didn't provide the loan approval by their extension date or do we actually have until closing to get everything in place? The sellers agent calls almost daily to harass me.

The scariest words you will hear as your career progresses will be: "No problem".

"Oh, that's no problem, my buyer will...........". Oh, don't worry about that, I'm sure the seller will................". "No problem, we'll take care of that..............." :p

Typically there should be "no problem" getting a mortgage 'pre-approval' letter from most lenders subject to appraisal and underwriter approval.

Even 5-10 days seems like a long time to get such a letter from most lenders.

If you haven't been able to get one since May 24th and it's now June 16th there could be a problem.

Further if the contract asked for the lender approval within 15 days and your side hasn't delivered it yet the sales contract may be voidable by the seller.

I advise you to go sit down with your broker, explain the whole situation, and see what his or her words of wisdom are.

I had a lender who kept beating around the bush on getting me a letter to submit with an offer... he even went as far as to call my broker and let her know that I was wanting a pre-approval letter for EVERY offer we submitted a house on. Obviously this wasn't the case he hadn't even got me one at all... needless to say this lender wasn't used in the end.

-J

She is right, they can't provide a loan "commitment" until after the appraisal is done. That's true for anyone. However, they should be able to get you a pre-approval right away, unless they don't think your buyer will qualify. Where did you find your lender? Your broker probalby has someone to refer you to who would fly to the moon for him.

By the way, I wouldn't really call the post "sellers agent impossible". He/she has to look out for their sellers. If the property has been off the market all this time just for the deal to fall through, and he never even got a pre-approval letter for the buyer, he's really let down his sellers in a big way. The sellers agent needs to know if this is going to go through, or get the property back on the market right away.

I agree, Carla. It sounds like the seller can be stuck up a river and the house has been off the market for no reason if that buyer doesn't qualify. Julie should have gotten the buyer preapproved from the start. I can't tell by the post if they'd already been approved for FHA only or if they hadn't been pre-approved at all.

I don't even send people lists of houses until they have full pre-approval. It leaves room for too many unknowns if they haven't gotten financing in place.

The buyers were pre-approved before the contract was written. The sellers agent wouldn't accept pre-approval, wanted the loan approval letter.

I thought you get that letter when the buyer has been fully pre-approved. They're also supposed to have a good faith estimate by now. If the lender has already pre-approved the buyer, then is the property not passing the lender's standards?

A Buyer CAN get a Pre-Approval Letter Without having a property's apprasial.... OR even having selected a property!!!!

It will just have a contingency that the property will Appraise for the contract / mortgage Value.

This Type Pre-Approval shows the Borrower/ Buyer is fully qualified.... NOW only the property has to prove itself in an appraisal.

I am NOT talking about a Pre Qualification Letter which is useless.... almost any lender will provide a Pre- Approval letter after they actually check the borrowers credit and the Pre- Approval will have the "house must appraise" contingency. I would change mortgage companies if they can't or will not do that. Countrywide can generally do it within 48 hours after borrowers data is supplied.

If the seller is holding out for the loan committment he is out of luck. No lender will give anyone a loan commitment without an appriasal. Like Reality Check said- it's the proepery's turn to prove itself, and that doesn't have anything to do with your buyer. I have no clue how other states contracts look, but in Colorado we have deadlines for appraisals and loan commitments writen into the contract. If you are past the deadlines I would understand his problem, but if you aren't past your deadlines....

In this market, I've urged numerous buyers to get a MORTGAGE COMMITMENT subject to finding a home.
Whenever I'm looking for a commitment (as the Listing Agent), I ask for the commitment with conditions, such as "Subject to an Appraisal". Our contracts are written that if we don't have a commitment by a certain date there is no automatic extension, waiting for appraisal.

Not sure why all the exclamation points, but that's exactly what I was driving at. Sounds like the buyer's agent needs to get everything they need to make this deal happen. It's not tough getting loan approval once the buyer is approved. You just need your inspections, surveys, and appraisals per lender requirements...or choose another lender with different requirements.

Something in the milk isn't clean. I am curios to know how this all pans out. If the lender pre approved the first time with a different loan product then it should be no problem most of the important needed documents are in.

My only question in this thread is around the statement by the selling agent regarding the buyers not have good credit to obtain the loan. Either she is making a guess which is very unprofessional to even suggest, or someone has shared confidential information with her. I certainly hope the mortgage company has not disclosed information they should not have.