Don’t Accidentally Start a Fire When Applying for a Mortgage


Don’t Accidentally Start a Fire
Install a Fire Detector
Within Your Contracts

         From start to finish … the dates and chronology of a Real Estate We aware of the length of time it takes to get a loanContract have become increasingly important to the outcome of the transaction.  This is certainly true here in my  Will County, IL  housing market, as well as across the nation.

      But as of late, I’ve received some  Real Estate Contracts with some time-frames written into them that have beenabsolutely impossible to meet.  To offer an analogy, they were a smoldering fire just waiting to burn.

     Perhaps my most clear-cut example of this was a recent loan where I received the freshly negotiated contract on my desk mid-afternoon on a Tuesday, and then received a call from the Seller’s attorney early the next morning wanting to know if I had the loan Clear to Close yet.

     Really?? 

     The return to a healthier housing market has brought competition back amongst Buyers for desirable sales properties.  That’s a positive.  However,  I’m now beginning to see Closing dates on Contracts being used as bargaining tools.  Dates being used in efforts to enhance the desirability of a Buyer’s offer …  the strategy being that a quicker Close might catch the eye of a Seller and deem the Buyer more attractive.

     Listen, I “get it” and see the temptation to do this.  However, arealistic  Closing timetable in the present market is 45 to 60 days out.  Banks, Lenders, title companies, attorneys, appraisal companies, etc. just don’t have the staff to keep up with the present demand or get things done faster.  (Beware of those that say they do or can.)  And don’t look for this problem to go away anytime soon.

     But so often, the current problem also boils down to this … Who’s the Seller of the property you are interested in?  In the current housing market, the participants do not always reflect the traditional Buyer/Seller/Realtor transactions of old.  Rather, the Banks are approving a  short-sale contract.  Add  “corporate seller” into the mix too … a Seller that can agree to the Contract only AFTER a week to 10 days of working through layers of management before signatures are obtained.

     My opinion is that we don’t have all parties to the transaction in sync right now, and the system is broke.  I’m sure many will wholeheartedly agree with me in that assessment.  With Lenders, such as myself, needing to see a finalized fully-executed  Contract before  I can ultimately achieve a  FINAL LOAN APPROVAL … the whole mortgage process has been slowed way down.

     When 8, 10, 12 days  can transpire on a Contract prior  to my being fully capable of acting upon it … and the Contract’s Closing date is scheduled  30 to 40 days out, you have a disaster just waiting to happen.  A fire is smoldering and about to break-out.

     Those time-frames don’t and can’t work for Lenders right now.  We realistically don’t have the time we need to secure clear-to-close and requests for Extensions of all kinds have to be made.

Make sure your closing dates are realistic     So what’s the answer? There IS no pat or quick-fix answer for these scenarios.  But ALL parties and entities involved in a transaction must demand and strive for more realistic Contract Closing dates.  My message to my Buyers is this … 

     Start the formal  Loan Application  prior  to offering to buy a Short Sale Property or a Foreclosed Property.  Start in ADVANCE of waiting/hearing of Bank or Seller Approval.  If you don’t, you run the very real risk of NOT receiving your Loan Approval on time and delaying your Closing.

     I always ask that the Buyer’s Agent assists me in convincing the Buyer to take this action.  Many do … and I’ve always found that our combined efforts work much more successfully in accomplishing this goal.  
    Don’t accidentally start a fire. Install a fire detector within your Contracts.  Let’s work together and find ways to keep the heat to a bare minimum … avoid the fires … and get our transactions closed successfully.
     *  Are you (or your clients) hoping to buy a home in  Will County  or elsewhere across Chicagoland?  Contact me  now.  I will put my 35+ years of experience and expertise to work on your behalf and guide you through processing to a successful mortgage Closing.

Gene Mundt

I am a 30+ year veteran of the mortgage/banking industry, with extensive knowledge and experience in mortgage and credit services, management, and real estate appraising. I am also an IL Certified Financial Planner. This unique combination of education, experience, and expertise affords me more complete and in-depth resources from which to service my clients and their needs.

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