One problem we commonly have in Utah real estate transactions, is failure to meet the financing deadline. When making an offer on a home, one of the deadline that will be set is the “financing deadline.” This is the date in which a buyer may cancel the contract, and get their earnest money back if they cannot get a loan.

Good Logan real estate agents know good lenders who get done what they say the will, when they say they will do it. Good Realtors also follow up regularily with the loan officer to make sure they are on top of things. However, even if you have the best real estate agent, sometimes the mortgage lender just doesn’t perform on time, or promise things they really have no control of delivering. Sometimes lenders are just complacent, and fail to submit the required paperwork in time to have the loan file completed by the deadlines set in the real estate purchase contract. They don’t find out that the borrower can’t really qualify for the loan they promised, until after the date in the contract has lapsed.

If after financing deadline the lender doesn’t perform, either the buyer or seller can choose to cancel the REPC. The Earnest money will then be given to seller and they will accept that earnest money as the liquidated damage, accepting that the earnest money amount is a fair value for non tangible losses. Only the seller has to choose to cancel the contract, the buyer doesn’t have to sign an addendum. The seller can cancel the contract based on the buyers default and get their money back.

It’s very important for buyers and real estate agents to be on top of things so that the buyers don’t lose their earnest money in the event that the lender can’t deliver.

When lenders don't have the paperwork into the title companies by the closing deadline, things get very complicated.

In most cases, the seller needs the money from the proceeds of their house sell, so they can move up and buy the house they're moving into, and can actually move into their new home. Then these sellers of the home they are buying have the same situation, and so on, and so. When one link of the home buying chain doesn't perfom on time, it creates a huge chain reaction where closings, and scheduled moving dates are postponed. This leads in many frustrated buyers, sellers, movers, cleaners, and real estate agents... Life is much easier when lenders actually do what they say they can do, when they say they can do it.