Jeff Pearl, Full Service Full Time Realtor (RE/MAX Distinctive / LIC in VA)

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Rainmaker
1,826,627
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

But that puts the earnest money deposit at risk if the contract doesn't close

Jun 25, 2016 12:13 PM
Rainer
97,766
Carol Wilson
Your $imple Home - Toronto, ON

Interesting change, but be careful of the logic in your conclusion (seller has to take the word of buyer).  It can be very useful to remind the buyers that seller has options and takes a dim view of offers without adequate backing. If best offer on the table doesn't have the proof of funds, seller can say a buyer was selected and has 48 (or 24) hours to provide proof of funds, otherwise second choice will be contacted.

Jun 25, 2016 11:51 AM
Rainmaker
1,587,208
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Lend Smart Mortgage, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

That is very sloppy and opens a can of worms to heresay allegations should there become a dispute.

Jun 26, 2016 12:39 AM
Rainmaker
5,353,938
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

that's an interesting and scary change....

Jun 25, 2016 11:31 PM
Rainmaker
3,937,275
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

I'm finding it difficult to understand the logic in this language in a contract. Not thought through!

Jun 25, 2016 11:00 PM
Rainmaker
3,462,255
Nina Hollander
Coldwell Banker Realty - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

If it's an addendum to the contract and seller signs without actually having financing approval they could be in breach of contract.

Jun 25, 2016 09:23 PM
Rainmaker
634,116
Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

Whoa! I do not understand why anyone supported making that change. Bad choice IMO.

Jun 25, 2016 12:38 PM
Rainmaker
3,587,938
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

The earnest money is at risk to be forfeited, but so is the probablity of closing!

Jun 25, 2016 11:38 PM
Rainmaker
815,975
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

The updated change does allow the buyer an option but does not obligate the seller to accept the 'word' of the buyer.

One of my first objectives to protect the seller is to remove the bank from the negotiation process by compelling the buyer to waive or quantify this contingency and provide proof of resources to fulfill their obligation.

Do not allow the seller to be damaged by the lender choice the buyer makes.

There are still two sides to this process. What the buyer wants (no commitment)  and the seller is willing to accept are part of the dance.

Jun 25, 2016 10:15 PM
Rainmaker
876,763
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

IMO makes no sense - but it figures - I'll keep my refusal statements in my contracts thank you

Jun 25, 2016 10:00 PM
Rainmaker
715,336
Peter Mohylsky. The Santa Rosa Beach Expert
PrimeSouth Properties - Santa Rosa Beach, FL
THE BEACH IS OPEN

I have not had a chance to review all the changes, this being one of them but I don't really understand the need to make these changes. 

Jun 25, 2016 09:27 PM
Rainmaker
886,178
Diana Zaccaro
Tropical Beachside brokered by eXp - Cocoa Beach, FL
"The Accidental Blogger" Cocoa Beach, Florida

That makes no sense at all.

 

Jun 25, 2016 02:41 PM
Rainmaker
1,083,340
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Good to know it applies to  VA only....

Jun 25, 2016 11:56 AM
Rainmaker
1,523,810
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

That seems so wrong to me!

Jun 25, 2016 11:55 AM
Rainer
19,291
Jackie Mazurowski
CENTURY 21 Myers Realty - Auburndale, FL
Polk County Gold Realtors

No

Jun 25, 2016 11:37 AM
Rainmaker
3,985,569
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

That is dumb

Jun 26, 2016 03:52 PM
Ambassador
3,695,516
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Like in Virginia the buyer has to trust the seller not to deliberately hide a material fact?

Actually, I don't have a problem with the new financing clause, at lest not as long as there is a significant earnest money deposit at risk if the buyer does not perform because financing is denied.

Jun 26, 2016 07:30 AM
Rainmaker
3,431,695
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Wow, really

Jun 26, 2016 04:54 AM
Ambassador
2,804,049
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Jeff - I'm not sure what problem that's going to solve, but the ones it could create are pretty obvious.

Jun 26, 2016 04:53 AM
Rainmaker
4,798,663
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Interesting.  I guess this would then put the escrow deposit into jeopardy.

Jun 26, 2016 04:52 AM
Rainmaker
3,645,692
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Interesting.  Our business can vary so much by jurisdiction.   Local matters. So does staying on top of changes in each of practices.

Jun 26, 2016 03:50 AM
Rainmaker
1,300,472
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I've never seen anyone ask for proof of having the loan with contingency removals.  As a matter of fact a buyers agent on a recent listing of mine removed the loan contingency prior to having a loan commitment!

 

If they remove the contingency and they don't get the loan, my seller gets their deposit.  Out here, it's always been "take them at their word."

Jun 26, 2016 03:26 AM
Rainmaker
1,311,564
Raymond E. Camp
Howard Hanna Real Estate Services - Ontario, NY
Licensed Real Estate Salesperson Greater Rochester

If there is no way to show how the home is going to be paid for there is no contract.

Jun 26, 2016 03:21 AM
Rainmaker
2,877,241
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Interesting. I can only wonder what the "thought leaders" were thinking when making this change.

Jun 26, 2016 02:32 AM
Ambassador
2,461,480
Fred Griffin Tallahassee Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

  That doesn't make any sense.

Jun 26, 2016 01:33 AM
Rainmaker
2,550,467
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Man cannot live a life governed by laws alone...It has to be interpreted

Jun 26, 2016 01:31 AM
Ambassador
1,615,470
Harry F. D'Elia III
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

I always ask for proof of funds when representing a seller.

Jun 26, 2016 12:24 AM
Rainmaker
1,045,853
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

I hope that the option to redact and initial remains. I know it would be happening on contracts I prepared or countered.

Jun 25, 2016 11:15 PM
Rainmaker
1,405,727
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Jeff Pearl Does this mean by removing the financing contingency, they still have to go through with closing? Or is it a way to back out of the contract?

Jun 25, 2016 11:14 PM
Rainmaker
4,432,838
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I agree with Lise.

Jun 25, 2016 10:07 PM
Rainmaker
1,027,150
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

It seems to be so difficult these days for some lenders to provide what we could consider a commitment letter, anyway, I don't have a problem with it. To be clear, we are talking about the commitment letter, not the preapproval letter...how often do Sellers even ask the buyer to remove the financing contingency?  I have not had a listing agent ask for the financing contingency to be removed in, well, so long, I don't even remember the last time I even did it. 

I have always thought the financing contingency was heavily weighted toward the Buyer, anyway, leaving the Seller in the cold (especially when it comes to the 3 day notice asking for the removal of the financing contingency), that I was just glad to see some of the power returned to the Seller. 

The financing contingency is not a complete get out of jail free card for the Buyer, anyway, so even if they do not remove it, it does not offer a lot in the way of protection.  

Bottom line is, I think the new changes regarding the financing contingency actually should help to make Buyers think twice about their choice of mortgage lenders, stay on top of their lenders and make sure they get their docs in as requested.  

I always thought the Financing Contingency should expire automatically unless both parties agreed to extend - Buyers need to pick good lenders and put their money where their mouths are. 

Jun 25, 2016 09:38 PM
Rainmaker
1,911,086
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

On the surface , this doesn't sound good

Jun 25, 2016 09:37 PM
Rainmaker
3,064,654
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

That's a perfect example of why we created an Addendum that "prevails" over any conflicting language elsewhere in the contract!

Jun 25, 2016 09:15 PM
Rainmaker
5,816,454
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is an interesting change and a good blog topic for you.

Jun 25, 2016 08:56 PM
Rainmaker
1,157,329
FN LN
Toronto, ON

Very interesting to see how our neighbours to the south draw up their contracts.

Jun 25, 2016 04:52 PM
Ambassador
4,306,594
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Jeff, indeed it doesn't make any sense .

Jun 25, 2016 02:49 PM
Ambassador
3,985,140
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

That is surprising and I do not agree with. What were they thinking?

Jun 25, 2016 12:31 PM