Loan Contingency Angst? Breathe....

Written by Posted On Thursday, 10 October 2013 13:05



Release of loan contingencies continues to be a very grey area during a transaction.

As with anything in business, nothing is a sure thing, but with the proper guidance and the right team, you can minimize the stress and uncertainty of this and other issues during a transaction.

If you’re working with an experienced and competent lender, they will provide you with a list of required documents upfront to minimize any surprises and be proactive. If you want a smooth lending process, don’t wait until the last minute to start accumulating them. Extensions cause a lot of friction in a transaction, and with our current lending environment, release of loan contingencies tends to be one of the issues that leads to them.

Yes, the lender will ask for items such as proof of employment closer to the close of escrow than is within your comfort zone, but this is not an unreasonable request as occasionally people do lose their jobs and have other changes that occur. Just breathe and know that all is proceeding as normal.

So when do you release your loan contingency? It’s important that your Realtor and lender communicate clearly on the lender’s realistic expectations of when they can accomplish what they need to with the contingency period. Here in California, the CAR contract has a built in 17 day contingency period for loan and property contingencies, but currently, and in particular, when working with a direct lender, a 14 day loan contingency may be realistic.

An example of a Realtor not communicating clearly with their clients occurred with one of my listings earlier this year. When it came time to release their loan contingency, the agent came up with one excuse after another as to why they needed an extension. The sellers reluctantly agreed to an extension, not once, but twice! Both times we provided them with a Notice to Perform until they relented-1 week before closing! The last reason for the extension was that the lender was asking for proof of employment documents. As I mentioned, this is common practice, and had they been prepared in advance, this could have eliminated a lot of angst on both sides.

My initial recommendation was to cancel the agreement, however fortunately for them, one of my clients insisted on sticking with these buyers. They had no idea how close they were to losing the home of their dreams, and quite possibly their earnest money deposit (this rarely happens), because they were ill-prepared for the standard expectations during a transaction.

For some people, this is a risk they feel they are not prepared for, for others they realize this is a leap of faith that with the right team they are better prepared to make. 

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Lisa Wiseman



A Silicon Valley Native You Can Trust...

A local Bay Area native who grew up in Cupertino and a resident of Almaden Valley, for over 25 years, Lisa has been a full time Realtor for 11 years with Intero Real Estate Services, a premier Silicon Valley company.

Prior to her career with Intero, she had successful careers in the pharmaceutical and grocery industries that assisted in sharpening her sales and negotiating skills. Once her career in real estate began, it became clear that real estate was her true passion. "I work tirelessly to help both my sellers and buyers achieve their real estate dreams, delivering the best customer service possible. I believe that my clients deserve a tireless advocate during the process. I receive great satisfaction from assisting home buyers and sellers, whether assisting seniors and their adult children with resources to sell the family home and downsize, handing the key to excited first time home buyers, or assisting investors with 1031 investments or flips. I am committed to providing my clients with the knowledge, negotiating skills, the latest in high tech home buying or selling, educating you on the home process, and whatever is required in partnering to achieve their goals. Entertaining children so clients are able to view homes, and checking up on home bound seniors is all part of the work I love. The sale and purchase of your home or investment property is the most important sale and purchase you can make, and it should be treated that way."

As a Seniors Real Estate Specialist(R), our team is experienced and knowledgeable in meeting your specific needs. And that can make all the difference in the world. Moving can be very stressful and overwhelming, particularly for seniors and their families. We assist seniors and their families with their personal downsizing or aging-in-place needs in the sensitive and caring manner needed to transition during these difficult changes. We are accustomed to working with the most difficult of family dynamics and situations at a very trying and challenging time to make this as smooth a process as possible.


Whether you’ve lived in your home 2 years or 20 years, you know it’s not just a shelter, or even another investment. It’s the place where your dreams come to life. In flower gardens and family rooms. Backyard barbecues and home-cooked Sunday dinners. It’s the place we raise our children. The nest we nudge them out of, and welcome them back to again and again. And for some, it’s even our place of business.

But there comes a day when it’s time to move on. Time to reflect on old memories, and build new ones. Time to leave the past behind for a new future. It’s no wonder why selling a home is often emotionally charged and potentially overwhelming. I understand. That’s why I am dedicated to making your transition smooth and care free as possible. Helping you make the process simpler. Helping you save money, and avoid costly pitfalls.

Let me be your advocate...


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