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We are fast approaching the 45-day mark in waiting for our buyers' mortgage commitment to come through and we're not sure how long to wait. It's a sizeable jumbo mortgage and the buyers have also gotten a home equity loan from the same major bank (on their current home, said to be flooded during a severe storm) to put toward the down payment on our home. When all is said and done, they may only be putting down around 13% of their own money. It appears their existing home also has a jumbo and that they are not selling it at the moment.
The buyers promised in the contract to get their commitment well before now and they also never disclosed their need for a home equity loan. Our former listing agent (left for another agency) and our former attorney (fired) had told me not to worry when I asked for the buyer's pre-approval letter eight times, finally got only the first page and wondered what was on the rest of the several pages. Now, I'm thinking there were a lot of contingencies on those other pages that I should have seen.
Clearly, we can terminate the deal now, but we would be without a sale and without compensation for our legal fees. We would rather go forward and close the sale.
We are wondering whether the buyers are getting cold feet and are deliberately dragging things out. We are told they are extremely anxious to get the mortgage and occupy the house, but we're not so sure. (Their lawyer told ours that we could pull out if we didn't want to wait.) We have also been told that the buyers have a very solid business and personal relationship with the bank, but we also hear they are being made to jump through hoops to supply documentation. We wonder what their experience would be like without this so-called "relationship."
Our listing agent has been calling the loan officer regularly. If the buyers are stringing us along, would it be normal for the loan officer to cooperate with them in doing so? In the meantime, we can't commit to a purchase of our next house or take some of the other steps toward moving. We worry that our home is off the market during prime selling season and that we could lose the home we would like to purchase. We're in limbo.
What would you do? I would especially like to hear from agents and others who have had recent mortgage experiences with major banks. Thanks.
I would say 45 days is plenty of time to get a loan commitment. Really, plenty of time to get a loan. The only time I've been in a situation that took longer, the buyers agent was also the mortgage broker (yes, it's allowed but I hate it) and I got the feeling as we were being strung along that the buyer was waiting for more money to come in, maybe a bonus or something) and the agent/mortgage guy kept delaying a bit at a time.
Is your house in a hot market? Will it sell quickly if you put it back on? It might be worth sending the buyers your state's equivalent of a Notice of Buyer to Perform. Then you have the option to cancel the deal if they do not show their loan approval. This is prime time and you don't want to wait until the end of summer.
Don't know your contract but maybe the buyers are at a point where they will lose earnest money if they cancel so the are hoping you will cancel instead?
We are fast approaching the 45-day mark in waiting for our buyers' mortgage commitment to come through and we're not sure how long to wait. It's a sizeable jumbo mortgage and the buyers have also gotten a home equity loan from the same major bank (on their current home, said to be flooded during a severe storm) to put toward the down payment on our home. When all is said and done, they may only be putting down around 13% of their own money. It appears their existing home also has a jumbo and that they are not selling it at the moment.
The buyers promised in the contract to get their commitment well before now and they also never disclosed their need for a home equity loan. Our former listing agent (left for another agency) and our former attorney (fired) had told me not to worry when I asked for the buyer's pre-approval letter eight times, finally got only the first page and wondered what was on the rest of the several pages. Now, I'm thinking there were a lot of contingencies on those other pages that I should have seen.
Clearly, we can terminate the deal now, but we would be without a sale and without compensation for our legal fees. We would rather go forward and close the sale.
We are wondering whether the buyers are getting cold feet and are deliberately dragging things out. We are told they are extremely anxious to get the mortgage and occupy the house, but we're not so sure. (Their lawyer told ours that we could pull out if we didn't want to wait.) We have also been told that the buyers have a very solid business and personal relationship with the bank, but we also hear they are being made to jump through hoops to supply documentation. We wonder what their experience would be like without this so-called "relationship."
Our listing agent has been calling the loan officer regularly. If the buyers are stringing us along, would it be normal for the loan officer to cooperate with them in doing so? In the meantime, we can't commit to a purchase of our next house or take some of the other steps toward moving. We worry that our home is off the market during prime selling season and that we could lose the home we would like to purchase. We're in limbo.
What would you do? I would especially like to hear from agents and others who have had recent mortgage experiences with major banks. Thanks.
That's a tough spot in which to be stuck. I'm curious to know what the loan officer is telling your agent, to see where the real bottleneck exists.
I would suggest going to the buyer and being as frank as you were in this post. Tell them that you are concerned about the excessive time it's taking, and you would like to know what's going on. Point out that they have missed the deadline, and that you have the right to cancel the contract, but that you would prefer to work with them so they can buy the house. Let them know that if you have all the facts, and if they are honestly trying to get it done so they can buy the house, you may consider an extension of their mortgage deadline, but that you need to be kept informed.
I'd also consider continuing to market the house, especially if you do grant an extension on the commitment date. Be open & honest with everyone involved. Let the buyers know you are marketing it for backup offers in case they can't get the mortgage. Let potential lookers know you have accepted an offer and are taking backup offers. I know markets differ, so discuss this with your agent, to see if h (s)he thinks it's a good idea or if it would somehow hurt you.
That's a tough spot in which to be stuck. I'm curious to know what the loan officer is telling your agent, to see where the real bottleneck exists.
I would suggest going to the buyer and being as frank as you were in this post. Tell them that you are concerned about the excessive time it's taking, and you would like to know what's going on. Point out that they have missed the deadline, and that you have the right to cancel the contract, but that you would prefer to work with them so they can buy the house. Let them know that if you have all the facts, and if they are honestly trying to get it done so they can buy the house, you may consider an extension of their mortgage deadline, but that you need to be kept informed.
I'd also consider continuing to market the house, especially if you do grant an extension on the commitment date. Be open & honest with everyone involved. Let the buyers know you are marketing it for backup offers in case they can't get the mortgage. Let potential lookers know you have accepted an offer and are taking backup offers. I know markets differ, so discuss this with your agent, to see if h (s)he thinks it's a good idea or if it would somehow hurt you.
Thanks to you and NinaN for your helpful advice. Since we work through attorneys here in New York, we have told the buyers' attorney that the occupancy window will have to be moved forward now that they are so far past the commitment deadline in the contract. The buyers' attorney even had the nerve to contact my lawyer and say he was "concerned" about occupancy, even though his clients don't (yet) have the money to buy our house. But, on that score, I should mention once again that we are in New York.
All we've heard is that underwriting is asking for additional documentation from the buyers almost daily and that the buyers are responding very rapidly and are very anxious to get into the house. Of course, we have heard that for several weeks now. As mentioned, my agent is in direct contact with the loan officer every few days. I'm not a banker, but it could not have helped that the buyers told us they would put more than 25% down but failed to reveal that they were also borrowing a sizeable chunk of the down payment from the same bank in the form of an equity loan on their flood-damaged current house. While they told us they were just going for the mortgage, they were actually applying for two home loans from the same bank at the same time. (Plus, they still have a sizeable first mortgage on the first home, so the extent of their overall borrowing on homes will be pretty steep.)
To add to this, our agent seems reluctant to show the house to anyone else and it is not usual protocol in our area. I understand that it's not easy to show a home under contract. Her agency's listing is up on May 1 and we're undecided as to who would represent us next. I can understand why she wouldn't want to buy a multiple listing at this late stage.
If we don't have a resolution by May 1, I may go FSBO and buy my own multiple listing. That might goose the parties into getting a transaction done or ferret new buyers out of the woodwork in our low-inventory market.
There really is nothing that can be done about banks. They work at their own speed and they appear (to me) to be very disorganized and uncaring.
You'd think they would have a list of what documents they need and could ask for everything all at once. But no. They wait until the very last second and have to have some paperwork today. Then 2 days later, it is an emergency for some other document. That behavior goes on for weeks.
How difficult to find another buyer? It sounds like your buyers are trying and it is a bank issue.
I am confused as to why your agent is refusing to take back-up offers on the house. I'd be wanting a really good explanation about that, and would probably put my foot down. Unless the agent neglected to put in the contract that back-up offers would be taken. The back-up offer thing is pre-printed in my local real estate documents but maybe with your local contract, that as to be hand written in and your agent made a mistake.
If your contract does not allow back-up offers, then what I would do would be to offer the buyers another extension but the extension would come with the terms that back-up offers would now be accepted.
There should be hard "drop dead" dates in your contract. At those dates, you can either extend or pull out of the deal. What does your contract say about that?
I don't know of any banks that issue official Commitment Letters any more. Too much has to happen, too much compliance. Usually the commitment comes in the form of closing documents.
Guidelines exist in order to mitigate risk. Usually, when someone thinks they've been asked over and over for the same thing, it's because they have yet to provide it.
All I can offer is dont let it drag on. We did, and right when those buyers were signing their FHA loan docs, they spoke in spanish, thinking the officer couldnt understand them, about how they were planning on renting out the home. So we waited for nothing, they were denied of course. I'd give them a deadline, period.
There really is nothing that can be done about banks. They work at their own speed and they appear (to me) to be very disorganized and uncaring.
You'd think they would have a list of what documents they need and could ask for everything all at once. But no. They wait until the very last second and have to have some paperwork today. Then 2 days later, it is an emergency for some other document. That behavior goes on for weeks.
How difficult to find another buyer? It sounds like your buyers are trying and it is a bank issue.
I am confused as to why your agent is refusing to take back-up offers on the house. I'd be wanting a really good explanation about that, and would probably put my foot down. Unless the agent neglected to put in the contract that back-up offers would be taken. The back-up offer thing is pre-printed in my local real estate documents but maybe with your local contract, that as to be hand written in and your agent made a mistake.
If your contract does not allow back-up offers, then what I would do would be to offer the buyers another extension but the extension would come with the terms that back-up offers would now be accepted.
There should be hard "drop dead" dates in your contract. At those dates, you can either extend or pull out of the deal. What does your contract say about that?
Thanks for your thoughts. I asked the agent about showing the house again and I was met with a distinct lack of enthusiasm, probably because the listing ends in less than two weeks and it would likely take longer than that to find new buyers. (Furthermore, this agent has probably established a relationship with the buyers and could be trying to get their business in finding another home if our deal falls through.)
I have to check my contract. I am not sure it even addresses backup offers. We could get out of the contract now, if we wanted, but it is financially much more beneficial for us to get the deal done, especially in time for us to sign the purchase contract on the next home that we want. The "drop dead" date in the contract for the buyers to get a mortgage commitment was less than three weeks after signing (hence that provision of the contract has now been "violated" by the buyers) and I should have been advised by someone that this was a ridiculous date. Unfortunately, no one stepped forward to tell me so and it has been some years since I applied for a mortgage myself.
We have some delays on our purchase end as well, so I am hoping that the buyers' commitment will come through before we need to sign our purchase contract.
We are fast approaching the 45-day mark in waiting for our buyers' mortgage commitment to come through and we're not sure how long to wait. It's a sizeable jumbo mortgage and the buyers have also gotten a home equity loan from the same major bank (on their current home, said to be flooded during a severe storm) to put toward the down payment on our home. When all is said and done, they may only be putting down around 13% of their own money. It appears their existing home also has a jumbo and that they are not selling it at the moment.
The buyers promised in the contract to get their commitment well before now and they also never disclosed their need for a home equity loan. Our former listing agent (left for another agency) and our former attorney (fired) had told me not to worry when I asked for the buyer's pre-approval letter eight times, finally got only the first page and wondered what was on the rest of the several pages. Now, I'm thinking there were a lot of contingencies on those other pages that I should have seen.
Clearly, we can terminate the deal now, but we would be without a sale and without compensation for our legal fees. We would rather go forward and close the sale.
We are wondering whether the buyers are getting cold feet and are deliberately dragging things out. We are told they are extremely anxious to get the mortgage and occupy the house, but we're not so sure. (Their lawyer told ours that we could pull out if we didn't want to wait.) We have also been told that the buyers have a very solid business and personal relationship with the bank, but we also hear they are being made to jump through hoops to supply documentation. We wonder what their experience would be like without this so-called "relationship."
Our listing agent has been calling the loan officer regularly. If the buyers are stringing us along, would it be normal for the loan officer to cooperate with them in doing so? In the meantime, we can't commit to a purchase of our next house or take some of the other steps toward moving. We worry that our home is off the market during prime selling season and that we could lose the home we would like to purchase. We're in limbo.
What would you do? I would especially like to hear from agents and others who have had recent mortgage experiences with major banks. Thanks.
I can't recall exactly what I heard about the Sandy mortgage thing that was extended from 6 months to a year. If that storm you're referring to was Sandy they may be in a muddle with that, their mortgage and the govt. And maybe even a backlog of new applications dealing with that right at this time mark for so many.
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So we waited for nothing, they were denied of course. I'd give them a deadline, period.
