A Surprising New Reason Why Some Financing Conditions Need To Be Longer for Buyers
Until fairly recently, it was pretty standard here in the Collingwood area that you could get approval for financing in a 3-5 day turn around time so commonly, buyers offers were conditional for 5 days on obtaining financing approval. If you are seeking an insured mortgage and have a straightforward mortgage application where the lender does not ask for an appraisal, it can still be done in that time frame.
If however you are arranging a mortgage where the lender requires an appraisal of the property, as many if not most do now, the story has changed here. With the exceedingly busy market and limited number of appraisers in the area, applications are being held up because appraisals can’t be done in a timely fashion. I was just involved in a deal where it took over 8 days just to get an appraiser out to visit the property!
It’s really important for potential home buyers to get pre-qualified with their lender and ask how long will be needed for financing approval so conditions can be written accordingly. If the condition is too short, many sellers will not agree to an extension or a back-up offer could already be in place. Rather than just agreeing to a pre-printed clause in an offer, have the discussion with your REALTOR® about this concern before determining the length of your conditions. Your ability to successfully buy the property depends on it.