Want to avoid a complaint? If you are a buyer’s agent and the buyer needs to get a loan, here are a few tips on how to avoid issues that have led to some complaints to the Commission.
First, ask for enough days in paragraph B of the Third Party Financing Addendum for the buyer to have a reasonable chance of getting Buyer Approval by the deadline. Find out from the buyer’s lender what the lender’s timeframe is for approving this particular buyer. If the buyer does not get Buyer Approval from the lender or does not terminate the contract by the deadline, and does not qualify for a loan (absent some other “out” in the contract), the buyer most likely defaults and forfeits the earnest money to the seller. The buyer won’t be happy and may then file a complaint against you. Further, the defaulting buyer is unlikely to recoup any money already paid for transactional expenses, such as an option fee, inspection fee, or appraisal fee. The buyer will be disappointed and may blame you.
Also, if the Buyer Approval deadline is approaching and the buyer will not have an answer from the lender regarding Buyer Approval by the deadline, the buyer’s agent should submit an Amendment to the listing agent to ask the seller to extend the deadline for Buyer Approval. A buyer’s agent who fails to monitor the Buyer Approval deadline or to timely request an extension from the seller probably commits a violation by not looking out for the buyer’s best interest or, at a minimum, for negligent or incompetent conduct. A failure to fulfill these obligations is another reason the buyer may file a complaint with the Commission.
Remember – once the contract has been negotiated, a license holder cannot just sit back thinking that his or her job is done. The license holder needs to shepherd the transaction to closing, and that includes helping the buyer to understand the significance of the Buyer Approval deadline. Doing so is in both your best interest and your client’s best interest.