Q: Paragraph 2 of Form 22SS outlines the number of days after mutual acceptance that the parties have to secure Lender Consent. What happens if that deadline passes?
Carol in Kent, WA
A: If the date for Lender Consent outlined in the purchase and sale agreement expires, the agreement automatically terminates. However, termination of the agreement can be avoided. If the time limit is looming and it doesn’t appear Lender Consent will be given in time, the listing broker can prepare an addendum to the P & S agreement to extend the deadline. The addendum needs to reflect the additional time the lender will need, so it’s important to talk to the bank and get a realistic estimate of their timeline. That information can then be used to talk to the selling broker and help them set expectations for their buyer. When there’s uncertainty about where the transaction stands, buyers can get frustrated and walk away. If all parties have an accurate picture of the process, the chances of a successful closing are much higher.
Since there are so many variables in a short sale, from the timeline of individual lenders to laws surrounding liability, determining the best course of action can be confusing. If you need assistance with your transaction, we’re happy to help. We pay a 30% referral fee. Call Richard Eastern at (206) 612-5541 or email him at email@example.com.