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October 31, 2017 • Stay Connected!
         

QUESTION:  Buyer submits offer and contract gets signed around. In the offer, buyer had loan pre-approval letter from Lender “A”. A few days after mutual acceptance but BEFORE the 5 day period referenced in paragraph 1 Form 22A (Financing Addendum), buyer changes lender. Buyer did not get Seller’s permission as this was within the 5 days. Did Buyer waive the financing contingency since buyer did not get Seller’s permission? Listing Agent says buyer waived since buyer attached a pre-approval letter from Lender “A” with offer. Listing agent is arguing that when Seller agreed to work with this Buyer, Seller took into account the lender that buyer was using. Buyer Broker says no waiver since lender change was made within the 5 days. And if a buyer does change lenders within the 5 days, does anything compel buyer to inform Seller of this change?



ANSWER:  Listing broker is incorrect. Nothing in the PSA obligates buyer to use the lender who authors buyer's pre-approval letter. If seller wants to require buyer to use the lender who authored buyer's pre-approval letter, seller must make that a requirement of the PSA. Based on the boiler plate language of the PSA, including Form 22A, buyer is free to make loan application with any lender of buyer's choosing, so long as buyer makes loan application within five days following mutual acceptance. It is not unreasonable for seller to restrict buyer's choice of lender in exchange for allowing buyer to have a financing contingency but if that restriction is included, it must be specifically included by seller and listing broker, using language created by seller and listing broker, because it is not part of any of the boiler plate terms.
 

 

The Legal Hotline Lawyer does not represent Washington REALTORS or its members. To browse through our database of past Q & A's, visit www.warealtor.org. Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the Week. Please submit questions to legalhotline@warealtor.org . Please tell us your NRDS number when you e-mail the Hotline with your question.


 

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REALTORS®, Help Protect Homeowners
Congress is threatening tax incentives for homeowners, like the mortgage interest deduction and the state and local property tax deduction. These incentives are critical for a strong housing market that creates jobs and builds stable communities. Tell Congress that tax reform should not mean an increase on middle class homeowners.
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Primary Mortgage Rates Survey
(updated every Thursday)  Source:  Freddie Mac
 
 October 26, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.94%  3.25%  3.21%
 Fees & Points  0.5
 0.5
 0.4
 Margin  N/A  N/A  2.74



 October 19, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.88%  3.19%  3.17%
 Fees & Points  0.5
 0.5
 0.4
 Margin  N/A  N/A  2.74



 October 12, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.91%  3.21%  3.16%
 Fees & Points  0.5
 0.5
 0.4
 Margin  N/A  N/A  2.74



 October 5, 2017  30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  3.85%  3.15%  3.18%
 Fees & Points  0.5
 0.5
 0.4
 Margin  N/A  N/A  2.74





 
 
 UPCOMING CLASSES
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01-NOV Best of the Legal HotlineChimacum3.5More info...
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