Florida: How long is too long for a finance contingency? (appraisal, agent)

[kelabu]

I received an offer on my home from a buyer that was not pre-approved so I was very leery, but they really wanted the house yada yada yada, so I agreed. THe next day they come back and want a 25 day finance contingency instead of the agreed upon 15 and want a repair on an as-is house. I would like to tell them to shove it but I get really good advice here that calms me down.

[2bindenver]

A lot of things depend on what else is already in the contract, that you like - or that is not important to you.

Does the finance contingency include full loan approval after the appraisal? Does the closing date change? Is this repair major or minor? Would making the repair add value to the property?

You could:
Ask them for a bigger earnest money deposit.
Give them something else in exchange for the repair (something you don't care to move, or ???)
Say yes to the repair and no to the additional time or vice versa
or ???

[kelabu]

Thanks for your quick reply. The deal is not that great IMO. We're already paying the closing costs (17k) It was already priced right....only 4 houses under us and those were not updated at all. They want us to repair a screen that was ripped during Wilma. We never did the 2 panels because it was such a small job 4 contractors after the hurricane. It something that is readily seen on the patio, so I don't know why they woldn' t have asked before. It's an old house so there are plenty of things you could have asked for besides that. I'm scared this is the start of nickel and diming.

[shellytc]

Hmmm, they should be able to get a pre-approval within 24 hours, and you want to talk to the mortgage company that is doing the pre-approval and review the conditions that are being imposed.... that is what I would want anyway. Or, I would continue to show my home until they could perform on those conditions...

Are you working with a REA or are you doing this on your own?

Shelly

[kelabu]

Thank you thank you! We are working with an agent, but sadly Florida is so bootleg it's hard to trust anyone's motives. They are pre-approved, but she seemed hesitant about it and didn't share what the conditions and company are. Most of the agents we have encountered work as transaction brokers. I asked her to keep taking offers and ask for a larger deposit. They agreed to the deposit within an hour. She asked me to counter 20 instead of 25 days,before I asked for the deposit. I told her 5 days is not a big deal to me I just want the hose sold and doubling the deposit will let me know they are serious. She was really short and seemed upset about it, but oh well.

[palmcoasting]

What does that mean a financing contingency of 25 days? The don't apply for the financing for 25 days or they don't have to have a committment for 25 days and you are closing in 30? The "norm" is that they must apply within 5 days and their committment would be within 25 days. Is their mortgage broker local? Are they going for 100% financing? How much of a deposit is it? Is their pre-approval recent, such as within the past couple of weeks? If they aren't actually applying for 25 days, why? And why would your agent be upset about getting a larger deposit?

[kelabu]

The 25 days is for a commitment, They are supposedly pre-approved, but I found out their realtor is the mortgage broker too, so who knows what that piece of paper is worth. Of course the letter was dated on the day of the offer. They are financing 95%. I don't know why people do the things they do here anymore. I posted a few weeks ago asking if it was better to rent. This adds another mark in rent column...just to not have to deal with this mess for a while. Trying to figure out their motives is driving me crazy.

[TimtheGuy]

We're already paying the closing costs (17k)

That is awfully high for the seller paids...what is the price range of this property?

Hmmm, they should be able to get a pre-approval within 24 hours,

if they are A+ borrowers. Otherwise a "real" approval (fully underwritten) could take a week +.

[palmcoasting]

25 Days is a normal time frame to get the committment...a fully non-conditional committment. A pre-approval just means that they have told a mortgage broker, be it the Realtor or another mortgage broker that they have given information about their finances and situation, but have not actually applied. Within 5 days, they apply and then start submitting the various papers and backup that the stipulations of the loan call for. From there, they do the inspections, get the appraisal, etc. The letter is probably dated the day of the offer because that is when she 'qualified' them. The fact that they are going for 95% generally means their score is too low to get 100% and since the mortgage industry has changed in the last 4 months we are seeing more 95-90% financing. Since you say the Realtor is also the mortgage broker, and I trust she's revealed that in writing, I can understand her frustration. She is prohibited by law to reveal information to you. I'm surprised she didn't pass the loan part to someone else in order to save herself grief. But you can bet she's working extra hard to get the loan through.
The motives are: you want to sell the house so you can be out from under it and recoup your money, the buyer wants the house so they can call it their own, and the realtor/mortgage broker would like to sell the house so they can make their money. Everything you have described is perfectly normal. Stop over thinking it and relax.
And...as for renting... you think that's easy? Geez, you should see some of the things I've seen in property management.
The best of luck with your deal!

[kelabu]

Thanks palmcoasting. I guess I got suspicious because the contract said 15 then the next day they wanted to change to 25. So I started wondering if there was something wrong. Living in Miami too long has made me super paranoid =)
The broker/agent relationship wasn't disclosed in writing per se. When I asked some questions my agent told me. Then when I got the preapp letter the broker and agent listed are the same name.