Below is proof positive why home or condo buyers should get pre-approved before they look at a home or condominium in Las Vegas, let alone make an offer on one. The following paragraphs from Countrywide’s Addendum to Real Estate Purchase Contract spells it out are very well. A few notes about this addendum, which I will write about later. This is an automatic addendum that is submitted to the buyer upon consideration of an offer by Country Wide Home Loans by their REO (real estate owned) department. This addendum effectively replaces the offer and is an extreme example of a seller’s contract (a contract that is written to benefit the seller). I highly recommend that anyone who decides to buy a foreclosure set aside some money to consult an attorney before signing this addendum since as a real estate agent or Realtor we are prohibited from legal advice to our clients. The other point is Countrywide’s REO departments attitude about this addendum is, take it or leave it, and they have the right to act that way.
Below is the aforementioned paragraphs from the addendum, read it and I will discuss this vis-à-vis the necessity of getting approved part 2 blog post
“1: If the Agreement is contingent on financing, the Buyer shall apply for a loan in the amount of $__________ with a term of ____ years, at prevailing rates, terms and conditions. The Buyer shall complete and submit to a mortgage lender an application for a mortgage loan containing the terms set forth in this paragraph within three (3) business days of the Effective Date, and shall use diligent efforts to obtain a mortgage loan commitment within fifteen (15) calendar days from the said date. If, despite the Buyer’s diligent efforts, the Buyer cannot obtain a mortgage loan commitment by the specified date, then either the Buyer or the Seller may terminate the Agreement by giving written notice to the other Party. The Buyer’s notice must include a copy of the loan application, proof of the application date, and a copy of the denial letter from the prospective lender. In the event of a proper termination of the Agreement under this paragraph, the earnest money deposit shall be returned to the Buyer and the parties shall have no further obligation to each other under the Agreement. The Buyer agrees to cooperate and comply with all requests for documents and information from the Buyer’s chosen lender during the loan application process. Failure of the Buyer to comply with such requests from the lender that results in the denial of the mortgage loan shall be considered a material breach of the Agreement and the Seller shall be entitled to retain any earnest money deposited by Buyer.
2: If the Agreement is contingent on financing, as a sales condition, Buyer must obtain a pre-approval letter from a branch office of Countrywide Home Loans, Inc. (“CHL”) for a mortgage loan in an amount and under terms sufficient for Buyer to perform its obligations under the Agreement, and such letter must accompany the Agreement. The pre-approval shall include, but is not limited to, the pre-approval letter, a satisfactory credit report and proof of funds sufficient to meet acceptance of Buyer’s offer. Seller may require Buyer to obtain, at no cost to Buyer, loan pre-approval as Seller may direct. Notwithstanding any Seller required pre-approval, Buyer is not required to obtain financing from CHL or Seller-Buyer may obtain financing from any source. As an incentive for the Buyer to obtain financing from CHL, CHL will offer a free appraisal and a free credit report if the Buyer finances and closes the purchase of the Property through financing from CHL.
3: Cash offer: Buyer shall provide Seller proof of liquid funds on deposit in the United States sufficient to close this transaction. Such proof shall be provided within three (3) business days of the Effective Date and shall be subject to Seller’s approval. The Property shall remain on the market until such proof of funds is accepted by Seller. Notwithstanding the terms provided in Section 12 for inspection of the Property, in the event of a non-contingent cash offer all inspections shall be completed and any notice of disapproval shall be given to Seller within seven (7) calendar days of the Effective Date. Failure to timely notify Seller of any disapproval shall be deemed acceptance by Buyer of the inspection results and the condition of the Property. Cash offers shall not be subject to any contingency, unless specifically described in Section 10 of this Addendum.
4: The Buyer is aware that the price and terms of this transaction were negotiated on the basis of the type of financing selected by the Buyer. Any change of the loan type, loan terms, financing, or Buyer’s lender after the Agreement has been entered into shall be subject to Seller’s approval and may require, at Seller’s sole discretion, renegotiation of all or some of the terms of the Agreement.”
Related web-site pages: Follow our road map to insure you success in your Las Vegas real estate transaction, Getting the best deal in Las Vegas real estate transactions , Difference between pre-qualified and pre-approved
Information Web Net » Blog Archive » Las Vegas home and condominium buyers should get pre-approved … // Aug 15, 2008 at 7:23 pm
[...] Here’s an interesting post I found today.Have a look for your self, Here’s an excerpt, please read the full story at the blogFailure of the Buyer to comply with such requests from the lender that results in the denial of the mortgage loan shall be considered a material breach of the Agreement and the Seller shall be entitled to retain any earnest money … [...]
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Do not money to buy some real estate? Don’t worry, because this is possible to take the loan to resolve all the problems. Hence get a small business loan to buy all you need.
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