The Financing Contingency is not what it says it is. From the date of acceptance of the Offer, until the moment the lender approves disbursement of funds (at the end of the hour of closing when all…
The Financing Contingency is not what it says it is. From the date of acceptance of the Offer, until the moment the lender approves disbursement of funds (at the end of the hour of closing when all papers are signed) the buyer and seller are proceeding with a leap of faith. The buyer does not have a protection of their obligation to close being contingent on obtaining the funds to close from a lender. And, satisfaction of the Financing Contingency is no assurance that the seller will receive any money on the date of closing. The Wisconsin Offer to Purchase Financing Contingency, unless modified, is only a contingency for the buyer to be able to obtain a Commitment Letter….nothing is said about the offer being contingent on getting the money.
Financing Unavailable. It happens that the loan approval process uncovers a reason that the otherwise ready and able lender is not willing to issue a mortgage commitment letter for the buyer on the terms of the Offer, or on any terms. According to the contingency stated in the contract, the buyer agreed to send written notice to the seller stating the financing is unavailable and provide a copy of the lender’s rejection letter. The next step is for the seller to take up to 10 days to finance the transaction on the same terms…unless the buyer’s agent filled out the Offer as suggested with a name of loan source. Because it is common practice to write in “Conventional Loan” even though the offer prompts in capital, bold letters (INSERT LOAN PROGRAM OR SOURCE), buyers are sometimes in an unattractive spot waiting up to ten days for sellers to release them from the contract.
Nahum Waxman, author of Cooking Dumb, Eating Dumb gets asked, “Will the recipe work?” His answer is deeper and clearer than a yes or no. Nathan says in essence, It is they who must work, and think. They must apply intelligence to ideas.
The moment you sit down with a blank real estate contract and a client with hopes, you apply your intelligence, your insight, your creativity to crafting a plan. Whether the plan works depends on whether you think, work, apply your insight.
You can do it.
Born in 1938, at the height of the Great Depression Fannie Mae has aged well. Like your grandma, Fannie Mae is kind, easy to get along with, and unlike Grandma Lucy, she has about 262 homes in Wi…
Born in 1938, at the height of the Great Depression Fannie Mae has aged well. Like your grandma, Fannie Mae is kind, easy to get along with, and unlike Grandma Lucy, she has about 262 homes in Wisconsin for sale. Fannie is smart. She didn’t set out to be a titanic real estate owner, she got there the new fashioned way…people she guaranteed would never, actually did, walk out on their home mortgages. (NOTE: No judgment (on the public) here. Public policy, corporate greed, lender malfeasance, illegal real estate practices, forced people into decisions they would never have made.) And just like that Fannie’s phat with homes for everyone. And by phat, I mean she’s EXCELLENT!
Want to be a home home owner or a hero to someone? State at Homepath.com . Fannie is internet savvy. She built a fast, accurate, easy to use on-line process for finding homes and making offers. It’s so easy, us Realtors® can use it. Full disclosure, my first time through I challenged the system because, well because I do that. And I learned for you…don’t do that. Don’t challenge the system . Roll with it. Fannie isn’t demanding you jump through hoops; more like fill in the boxes. Follow these steps and you’re on the path home:
- Fill out your State Offer to Purchase Form
- Skip the inspection contingency and financing contingency…Fannie has her own
- Fill out the Fannie Mae Addendum…basically this form says we agree everything we have for conditions in our State Offer to Purchase form attached is over ridden by this Addendum. That’s cool. The Addendum is easier on the Buyer than the WI Offer to Purchase which has a seller advantage slant.
- Fill out any other (there may be one other) Fannie Mae form
- Have your buyer sign in ink. If Fannie is accepting digital signatures today I’m not aware. Do it old school…sign in ink. Black ink. Use your best penmanship…Fannie want’s Catholic school quality cursive.
- Find the home you’ve written the offer for on Homepath.com and click on Make An Offer
- You are now just entering digits and short summaries of contingencies…that’s easy!
- Last you upload your documents: Affidavit of owner occupancy (investors are not permitted for the first 20 days), pre-approval letter, Offer to Purchase, Fannie Addendum)
- Submit your Offer and wait mere hours for a response…Fannie doesn’t work on weekends, but she’s efficient.
Go and be bold. Be fearless. Be Humble. Fannie is fair but firm…play by her rules and you’ll be happy. She guarantees it.
When presented with evidence how likely are we to defend our belief before considering the evidence? Evidence challenging our beliefs based on hopes and wishes may trigger fearful reactions; rejec…
When presented with evidence how likely are we to defend our belief before considering the evidence? Evidence challenging our beliefs based on hopes and wishes may trigger fearful reactions; rejections of the messenger, defense building, rallying our friends to come to console our ego for example. Where does that get us? Can you think of a time when you went into a discussion as a trusted person of integrity, a valuable resource and left feeling rejected with your intent questioned?
As Realtors®, especially when we’re the first one on the job, our expert status is directly related to the degree our opinions match the opinions of the person we serve. For example: (Q) What’s my house worth? (A) Based on these three recent sales in the neighborhood, this, that, and the other thing, my opinion $275,000. (Response) What? There’s a house for sale for $350,000 and it’s not as nice as mine. Example Two: (Q) What should we do to get our house ready to sell? (A) Based on research homes which are up to date in colors, hardware, fixtures, paint, flooring, kitchens, baths, are more attractive to more buyers. (Response) What? I think it’s better to let people pick what they want.
What do smart Realtors® know that the rest of us should know about these conversations? They know that they avoid them by not falling into the trap of being the “expert”. The client is intelligent. The client is reasonable and logical. Given the opportunity to discuss the alternatives and the process, and uncover the evidence, all of us are more likely to reach the same conclusion unless prohibited by an overwhelming factor which can’t be overcome…and those rarely exist.
How do we move to alignment and away from debate? One easy change we can all make, leave our pride, ego, and expert hat at home. Go to the meeting more eager to learn than to instruct. Be more willing to be enlightened than to enlighten. And then when you’re there, sit on their side of the conversation…physically and mentally.
- For discussing value, establish an agreement on a method. I believe the method that will matter in the end is the appraisal method. But if the owner does not, my Excel spreadsheet is useless. I also believe my Excel method will be more trusted when I am open to including methods the owner embraces. There’s room for more ways than my way.
- Where we sit matters. The person sitting at the head of a table is NOT the person in charge. Even if that seat is offered, it’s not the right seat to be in-partnership. Sit in the middle.
- Ask for their thoughts on criteria. My subjective opinions are as defenseless as anybody’s. Value adjustments are objectively subjective. Use their numbers so you all can see if there’s any real difference in the end.
- Listen. Let people talk. I know this, my opinion is more welcome when I’ve been given permission to share it. I am more likely to be welcome to comment when the other person has been heard….(that’s my challenge in any conversation and awareness is the beginning of change. :))
- Remember, the decision to do business is a bilateral agreement. It’s OK if I’m not a match. As long as I gave the owner the opportunity to express their opinion and weigh those opinions against the facts I am able to make a reasonable decision about offering my commitment to a plan of action. “No, we are not a match.” is an option for all of us.
It’s a kind gesture to say, “You’re the expert. We trust you.” It’s flattering to be considered an expert and to be trusted. And to be a trusted expert, open the door to cooperation, dialogue, ideas, perspective, and opinions.
That’s my opinion. I’d like to hear what you think.