Are you ready to buy a house? Great, then that means you have spoken to a bank or a mortgage broker, you have a pre-approval letter stating what you can afford, you have a down payment ready to go, and you are prepared to make an offer if the right house comes along, right?
This is a great start, and if you have gotten this far, you know there are several more milestones to pass before you are settled in your new home. First you have to find a place, make an offer, sign the binder, get through inspections, and more.
To be more specific, in Fairfield County making an offer is a two-step process. The first step is the binder agreement and the second is the contracts. It is on the binder that you first stipulate your mortgage contingency, which requires a time frame. Sellers’ agents want this to be as short as possible and buyers’ agents want to give their clients plenty of time to avoid having to ask for an extension. The problem is banks move at their own pace.
If the binder states a mortgage commitment will be obtained within thirty days from signed accepted offer, the clock starts ticking at the time the binder is signed. Unfortunately, many banks won’t order an appraisal or start to work on that file until they receive signed contracts. This can take up to two weeks from the signing of the binder. That cuts into the thirty day time frame by quite a bit and can be very problematic for the buyer.
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A proactive solution is to try and have your binder state that the mortgage contingency is thirty to forty-five days (check with the bank) from the signed contracts and go to contracts as soon as possible. This will be tricky because the seller won’t want to have their home off the market for too long without certainty that it is going to close since they may miss out on other potential buyers. But the key to the whole negotiation is to have things move as quickly as possible. Get inspections done immediately and get your deposit ready to be put in escrow. That will free things up so you can get a copy of the signed contract to your bank as soon as possible.
The bottom line: Communication is the key to your negotiations. Make sure everyone is speaking the same language and stay informed of potential hurdles so you can ensure you get the home you want.
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