Real Estate Forums

Ask An Agent Have a real estate related question? Why not ask a real estate professional. Here is where you post any and all real estate related questions that you may need answers to, Im sure there are more then a few agents that will be happy to reply.

Reply
 
Thread Tools Display Modes
Old 04-10-2004, 03:45 PM
Wayne Griggs's Avatar
Wayne Griggs Wayne Griggs is offline
banned
 
Join Date: Apr 2004
Location: Atlanta
Posts: 131
Wayne Griggs is on a distinguished road
Default Here is a challenge

Here is a challenge .. see if you can help Solve this case.... who is in the right? Buyer or Seller?
Regarding Financing....

15. "FINANCING: This Agreement is subject to Buyer obtaining an approved conv mortgage of 80% of purchase price,at an interest rate not to exceed mkt % and amortized over a period of 30 years."

15-a Buyer to provide Seller with letter from lender showing that Buyer has made application and, subject to verification of information, is qualified for the loan requested within 7 days from the Effective Date of the Agreement."

The Effective date of Agreement is December 10th. Buyer has complied.


15-b "Buyer to provide Seller with mortgage commitment letter from lender showing that Buyer has secured the loan commitment within 30 days of the Effective Date of the Agreement (Effective date of agreement is December 10th)."

The buyer has not complied.

15-c "If either of these conditions, is not met within said time periods, Seller may terminate this Agreement and the earnest money shall be returned to Buyer."

The seller did not terminate this agreement. The seller acted in good faith with the knowledge and concern for the buyers. Due to the holidays, the buyer's appraisal could not be performed until January 6. The Seller allowed the contract to proceed to give the buyers time since the appraisal was done only 4 days prior to the deadline for the buyers to provide seller with a mortgage commitment letter.

The Question is... Regarding the Sales & Purchase Agreement, is item #15-b considered as being met?
If so why and if not, why not?

15-d After (a) and (b) are met, buyer is obligated to notify Seller in writing if the lender notifies Buyer that it is unable to or unwilling to proceed with the financing. Any failure by Buyer to notify Seller within 48 hours of receipt by Buyer of notice from the lender shall be a default under this agreement.

Who is in the right Buyer or Seller?


Just a little something to open up some discussion

I look forward to hearing your opinions
Reply With Quote
Old 05-17-2005, 08:37 PM
nedsram nedsram is offline
Real Estate Nu-bee
 
Join Date: May 2005
Posts: 4
nedsram is on a distinguished road
Default Re: Here is a challenge

Atlanta Realtor:

Here's my take on it!

Buyer had 30 days from Effective Date to provide seller with Mortgage Committment letter....that would give Buyer until approx. Jan 10th

Appraisal was done, albeit only 4 days prior to the Jan 10th deadline, and I assume, Mortgage Committment letter was given to the Buyer, but Buyer didn't submit same to seller??

So why didn't Buyer submit letter to Seller? Probably just got Buyers remourse and wanted out of the Agreement!

Re 15-d: It only comes into play if 15 a & b are met, and 15b was not met....even though Buyer did receive Mortgage Committment letter, it wasn't submitted to the Seller.

The wording of the conditions assumes that both parties want to proceed with the transaction......when in this case it appears that the Buyer changed their minds and wanted out.....and IMO could get out by simply not forwarding the Mortgage Committment letter!

Where was the Buyers agent in all this? Surely they wanted the transaction to proceed?

How could you avoid this?

I don't know how this would work with your State laws, but how about

Buyer agrees to obtain and submit to Seller or Seller's Agent, a Mortgage Committment letter, or a letter of Mortgage Rejection, from Lender within 30 days of the Effective Date of Agreement. If Buyer submits a Mortgage Committment letter this Offer becomes a binding and legal contract. If Buyer submits a Mortgage Rejection letter, Seller agrees to terminate this agreement and return earnest money to Buyer, in full without deduction. Buyer acknowledges that, failure by Buyer to submit either a letter of Mortgage Committment or Rejection by the specified date will result in the cancellation of this transaction and the forfeiture of the Buyers earnest money to the Seller, in full, without deduction or recourse.

Steve
Reply With Quote
Old 05-19-2005, 07:55 PM
Duncan Pollock Duncan Pollock is offline
Real Estate WebMaster
 
Join Date: May 2004
Location: Niagara-on-the-Lake, Canada
Posts: 115
Duncan Pollock is on a distinguished road
Default Re: Here is a challenge

Wow! What an interesting way to write up an offer:
Quote:
Buyer agrees to obtain and submit to Seller or Seller's Agent, a Mortgage Committment letter, or a letter of Mortgage Rejection, from Lender within 30 days of the Effective Date of Agreement. If Buyer submits a Mortgage Committment letter this Offer becomes a binding and legal contract. If Buyer submits a Mortgage Rejection letter, Seller agrees to terminate this agreement and return earnest money to Buyer, in full without deduction. Buyer acknowledges that, failure by Buyer to submit either a letter of Mortgage Committment or Rejection by the specified date will result in the cancellation of this transaction and the forfeiture of the Buyers earnest money to the Seller, in full, without deduction or recourse.
Sure does tie things down for everyone's benefit and stops any weasling out, which does occasionally happen.

Duncan
Reply With Quote
Old 05-19-2005, 11:46 PM
Homesurfer's Avatar
Homesurfer Homesurfer is offline
Professional Contrarian
 
Join Date: May 2004
Location: Orange County, California
Posts: 786
Homesurfer is on a distinguished road
Send a message via Yahoo to Homesurfer
Default Re: Here is a challenge

What is a "Commitment Letter," you ask?

The loan officer goes to his computer, pulls up Microsoft Word, opens a blank page with the company logo on it, and types up something that sounds pretty good (often quoting parts of the conditional loan approval) that the buyer can give to the selling agent so that the selling agent can give it to the listing agent so the listing agent can show it to the sellers and make them feel real happy (like when you pass GO while playing Monopoly).

Oh yeah...(almost forgot)...the loan officer types "Commitment Letter" at the top of the page.
__________________
Terry Light - Professional Contrarian
Office Phone - (949) 305-7995
RealEstateBytes.com
Real Estate Encyclopedia
Author for RealEstate ABC (Creator, too)

Last edited by realestateabc : 05-20-2005 at 12:03 AM.
Reply With Quote
Old 05-20-2005, 08:38 AM
judyo's Avatar
judyo judyo is offline
Moderator
 
Join Date: Jan 2005
Location: Oak Lawn, IL
Posts: 3,092
judyo will become famous soon enough
Default Re: Here is a challenge

Terry,

You made me laugh for the first time today!
__________________
Southwest Chicago Suburbs Real Estate is an affordable area with close access to downtown Chicago. Money Magazine says that Orland Park real estate is one of the best places to live in the U.S.
Reply With Quote
Reply


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
CSS: Absolute Positioning Challenge ResaleBroker Coding 13 03-28-2005 08:04 PM

For our members

Main Sections

IDX Coverage Areas

Spiders Welcome

All times are GMT -7. The time now is 09:28 PM.


Powered by vBulletin® Version 3.6.4
Copyright ©2000 - 2008, Jelsoft Enterprises Ltd.