There is Nothing RUDE About Operating Per the Real Estate Contract
The other night in our office bull pen, there was a lively discussion about whether or not a Bristow-Gainesville Listing Agent should advise their sellers to deliver notice to their buyers when the financing contingency has expired. You see, the way our local real estate contract works is that a buyer has a financing contingency, that sometimes includes the appraisal, and there is a certain amount of time for that financing to be approved. Most financing contingencies would probably be about twenty-four to thirty days. If they aren't voluntarily removed and are not called by the sellers, these contingencies continue up to settlement.
Why would leaving a financing contingency in place be a big deal? Well, if a buyer is having an issue with their financing, sellers would rather know sooner, rather than later, correct? And if a seller never called the financing contingency, even if the financing blew up the night before closing, the buyer could reasonably expect their earnest money deposit to be returned to them. For a seller who has spent a month or more off the market, you can see where there would be some hard feelings when there is no recourse with regards to retaining the earnest money if a buyer is able to void the contract under their financing contingency, right at the settlement table. That is why leaving a financing contingency in place is a big deal.
When it comes to the method for removing the contingency, spelled out in the financing contingency itself, some buyers, taking the lead from their agents, find the delivery of a notice removing the financing contingency offensive . A seller is to deliver a written notice that the financing contingency has expired. Once that notice is delivered, the buyers have three days to void the contract or everything goes on as planned, minus a financing contingency protecting the buyer's earnest money deposit, and the parties proceed to settlement. If something blows up with the buyer's financing after that contingency is removed, the seller is entitled to the earnest money, if there aren't any other contingencies protecting it. Simple.
Buyer agents will scream, "Why did you send that notice to my buyer's email? They were at work." Well, per the contract, you Mr. Buyer's Agent, had deemed that for a document to be deilvered to your buyer it had to be directly to your client's email. It's right there in black and white. If you hadn't written their emails in the space for delivery, and your own instead, it would have come only to you.
Or sometimes buyer agents get bent that you, as a professional listing agent, did something no other listing agent does. "Why did you send this? No one else does?" Well, just because other listing agents don't adequately protect their sellers doesn't mean that's how I operate. When I have seller clients, they are advised how the financing contingency works, and what role they must play in removing it if a buyer isn't willing to remove it voluntarily. Some sellers aren't up for it, but for those that are, this listing agent is going to follow the road map set forth in the contract.
Just my opinion, but if buyer agents really cared to read and understand the contract, they may fill in some blanks differently. They may also advise their buyers that a notice may arrive when the financing contingency has expired. Not doing either and acting put out that the sellers in a deal decided to exercise their contractual rights to remove a financing contingency is unprofessional.
The best business practice always starts with the simplest question. "What does the contract say?" If the contract allows the buyer's financing contingency to remain in place unless it is called by the seller, why are buyers shocked when a seller makes a perfectly legitimate move to remove it? Beats me. Then again, I know the contract like the back of my hand.