Q. The buyer on my home asked to extend the removal of the loan contingency. What happens if we extend and they still don’t remove the contingency?
A. In this lending market, it is not uncommon to have delays regarding loan approval. Sometimes, for no other reason than a back-up on the underwriting side or appraisal process that has nothing to do with the buyer’s ability to get a loan.
As the seller, you have a couple of questions to ask before determining your next steps.
1.) Why is more time needed? What are the details? Are these resolvable issues or does it put the buyer at risk of not being able to obtain the loan?
2.) How much time is needed to get it all approved? Will this effect closing date or can close of escrow remain the same?
Sit down with your agent and based on above questions decide if you would like to allow an extension or generate a “Notice to Buyer to Perform”. Which basically states,”release your contingencies or cancel the contract”.
In my opinion and many years of real estate, I rarely have to have sellers issue a notice to perform. As agents it is our job to manage timelines and stay ahead of the dead lines not behind them. Find out the reasons for the delay, make decision on whether it is worth the wait, or have the buyer release the contract so that you may look for a new buyer.