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Do contigency deadlines even matter?
I don't really understand what the point of having contingency deadlines is because at least according to our realtors, there is really nothing we can do now that buyers have passed the deadline. Our buyers wanted a 30 day close and wrote in the contract they would remove their financing contingency at 15 days. That has come and gone and they are working towards it I know but haven't removed the contingency yet since they just did the appraisal. I get that it's not their fault but we wouldn't have done a 30 day close if we had known the contingency meant nothing. Our realtors (who are representing both sides which complicates this) says they still think buyers will close on time. However, if we are expected to be out of our place, we need to pay deposits on an apartment and hire movers and will lose a lot of money if buyers don't close and we have to cancel that. We wanted to wait for contingencies to be removed so we could at least have earnest money to cover lost deposits if it falls through but they haven't removed the contingencies! We have to give our deposit to the apartment very very soon and I'm wondering if there is anything we can do. The buyers have not asked for an extension on contingency period, just haven't signed and our realtors say "oh, contingencies deadlines are just estimates". What I'm wondering is, since they missed the deadline, shouldn't they lose their earnest money if they don't close since they passed the financing deadline? I'm not sure where to look to find this information and since our realtors are representing both sides they aren't really the greatest help with this and just say that the buyers are trying...
I know the buyers don't want to sign until they are sure too but they can't possibly expect us to find an apartment, pack, hire movers, etc all last minute if they take forever to remove contingencies!
Re: Do contigency deadlines even matter?
To some extent, you're getting worked up over nothing. Financing is always a last minute thing. How many posts have you read on here from people freaking out because their packet has only just now gone to underwriting and they're supposed to close in 3 days? That's just the nature of home loans.
But to another extent, how qualified are your buyers? What do you know about their finances? What do you know about their lender? Every agent knows the lenders in town who take on the risky clients and therefore often don't come thru; likewise, they all know the awesome lenders who say, "they'll get a loan" and really mean it. Hopefully you were reasonably informed on their credit and income before accepting their offer. No detailed numbers of course, but things like, "Oh, Buyer's a doctor at Mercy. This will be the fourth home they've owned. Jill at First National said he's fully qualified. Jill's never steered me wrong before."
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Regarding the dual agent thing - Definitely not our choice. Buyers came through an open house with no agent and wanted to put in an offer right away and asked our agents to represent them... it happened and I'm not happy about it but that's another issue.
Our agents feel confident the buyers will be approved.However, our building is in litigation and I know that complicates things (buyers know all the details, lender knows, but still worries me because other people have had issues closing in our building. This lender says he's 100% sure he can close but until it's in writing, I'm nervous).
Also, regardless of if the buyers are qualified, having the financing contingency gives them the chance to get out for really any reason. We know they are getting a lot of money gifted from family. If they just change their mind on the property they could just say they no longer are being gifted money and they won't get approved and are out of the contract. I'm nervous about this because we lost our first set of buyers when they just got cold feet and backed out (not anything with our unit, they just changed their minds...) I think that's making me much more skeptical now since we were under contract once and it fell through.
Tell your Realtors you need to talk again about this, you are not happy at all and you want it addressed and you want to understand the situation completely. If they continue to give you the run around, talk to their manager. Contingencies DO matter and there are definite steps that can be taken. If your Realtors are telling you 'it is just an estimate' - that could be violation of the Code of Ethics. It does not matter if they are 'trying', they must ask for an extension. If it can't be agreed upon, the contract can be cancelled. Remember that all aspects of the contract (contract, addendum, extension etc must be agreed to by both parties. One does not dictate to the other. It is a bilateral contract).
I am very sorry you are going through this. I have worked as a dual agent before and it can work out very well. Unfortunately, it does not sound like things are going well in this case, based on what you've said so far. You deserve better!!!
Talk to your Realtors, if they don't remedy the situation, talk to their manager/broker. This needs to be handled properly. Here is a link to the NAR Code of Ethics. http://www.realtor.org/mempolweb.nsf/pages/2011code It may not answer all your questions but it may give you some amunition. Most of all, keep asking questions and investigate everything fully so that you feel you understand the situation.
I've very sorry to hear about this, it upsets me deeply. I'm trying very hard not get angry. I hope that it all gets resolved very quickly and with little further frustration.
Lighthouse State Beach, Santa Cruz.
From what I understand, the way it is here is that the financing contingency is only removed right before closing. We had 30 days to get approval, and we have an approval letter which states that we are approved subject to no adverse change in employment and sufficient cash at closing. We submitted that to the sellers, so they know we are approved.
Then the way it works is, the lender comes to the closing, does their thing with us and once the money is released, we go and sign stuff with the sellers.
Not sure if this is true everywherethough.
"Regarding the dual agent thing - Definitely not our choice. Buyers came through an open house with no agent and wanted to put in an offer right away and asked our agents to represent them... it happened and I'm not happy about it but that's another issue."
At least in my state, it IS your choice. In NH you SHOULD be asked when the listing agreement was signed if you will accept Dual Agency showings. I realize it was an open house, but even then, as a seller you would be then asked to sign a Dual Agency informed consent agreement prior to being presented the offer. If you were not comfortable with it, it should have been your choice to have another agent represent the buyers, possible even another agent from the same office (even if your agent wrote the offer for the buyers). It is also possible the standards are different in your state, but if you brought this concern up to your agent, there are certainly ways to handle it to ease your mind!