Brenda Kellen: Trust vital to realtor/buyer relationship
July 11, 2008
Q. I am negotiating to buy a condo. How do I know my realtor is telling the seller what I am saying?
A. Sometimes negotiations are very straightforward, other times they become convoluted and complicated. As the realtor, I will often convey my buyer’s perspective, requests, and questions via e-mail, including both the realtor and the buyer in the loop to be sure my buyer knows what is being said. It is also important to have a high level of confidence in your realtor’s integrity. Trust is vital to a successful transaction.
Q. We are going to purchase some vacant land by doing a line of credit on our current residence. Do you think the offer should be written as cash or as a loan?
A. I recommend writing the offer with a loan contingency. Even though you will be coming to the closing with cash, you are completing a loan process to get the money. If you write the offer as cash, you eliminate any protection for hurdles in the loan process for your line of credit.
For example, the contract with a loan contingency is conditional upon Buyer’s approval of the availability, terms, conditions and cost of the new loan. If the line of credit you are putting together has a higher interest rate than anticipated, you have the right to cancel the contract, up to a certain date, based on that fact. If the offer is written as cash, you waive all loan contingencies and have no protection for the rate/term of the line of credit.
Don’t forget. A line of credit has a three-day right of recession after you sign the loan documents, so be sure to schedule the closing accordingly.
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Your funds will not be available to forward to the title company until this three-day period has been satisfied. The right of recession is to protect the borrower, it gives you the chance to change your mind about taking out the loan. You have the right to sign paperwork canceling the line of credit. Fees associated with putting together the loan may or may not be refundable. Your contract should be structured to have the loan conditions deadline after the three-day right of recession just in case life throws you a curve ball and you are unable to continue forward with the purchase of the land. Crazy things happen in real estate and in our everyday lives and you can only do so much to protect yourself, but having a loan contingency for a line of credit or home equity loan is a good idea.