Where’s the responsibility to perform?
The Buyers and sellers reach Legal Binding agreement in the form of a fully executed Purchase and Sale Agreement. Throughout that multi-page document are myriad rules and responsibilities for each of the parties to the contract (The Buyers and the Sellers).
Among those “Rules and Responsibilities” are time deadlines which most frequently reference the “Binding Agreement Date” (BAD) as the point of origin from which to count days.
Upon signing, all parties know the rules and diligently move forward.
Everything is hunky-dory til someone who is NOT a party to the contract hits a snag or drops the ball or due to circumstances beyond control fails to perform “on time.”
Where’s the accountability?
If the lender over-promises and under-delivers and thereby is not prepared to close the loan on the contractually defined closing date, all kinds of doo-doo hits the fan as the Buyer and Seller scramble to adjust . . . Schedules must be changed, Movers called . . . maybe other real estate transactions also must delay . . . ONE lender misses the mark, and EVERYONE suffers.
That lender can shrug the shoulders and say “Sorry!”
No closing happens until the loan is complete, so we wait…
All parties to the contract still want the transaction to complete . . . and all are frustrated because NO ONE seems to have any “teeth” to move the lender along.
I cannot even begin to ‘splain the ill will that comes from scenarios such as these . . . and as a Principal Broker advising several Real Estate Sales Professionals, I can only coach ways to minimize these happenings.
The best damage control begins at the BEGINNING of the transaction with KNOWING the Mortgage Company and Loan Originator (and all other supporting “Vendors”). . . and then following through diligently with VERY thorough follow-up to be certain everything stays on a timely course.
Be sure all Docs go to the right places at the right times . . . follow up with the ordering and completion of inspections title work, and the appraisal . . . and 10 days prior to closing, begin a DAILY call to the Lender, Title Company, and cooperating REALTOR just to be sure now balls drop.
I’m pretty sure that 99% of all the lenders out there WANT to close ON TIME!
When they don’t, it sucks for everyone.
The best defense against this scenario is a great offense.
We REALTORS must MANAGE this contract to close process with NO assumptions that all the other moving parts are flowing without hitches.
With an average of @ 42 people touching EVERY deal during this critical phase of the transaction and only 2 “parties” with ALL of the contractual responsibility to perform, THIS is where we earn our bacon.