I have a friend in need

I have a friend in need

I have a coworker who put in an offer on a house about 30 days ago. We are located in the Portland Oregon area. He told his realtor what he wanted to do and his realtor accepted and signed off on it. The realtor then submitted the offer to the home owner who excepted the offer within 30 min. They did what they needed to do and now 30 days later they still have not closed and he does not have any information on what, when or why it is being held up. He is afraid that they are holding it up again to avoid the 4.8% interest rate that he was told he would get.

Here is the question my coworker has. I guess this is kind of in two parts, hope it makes since.

Is it normal to take up to, or more than 30 days right now to close? This is the Portland Oregon area, or are they possibly stalling it so they don’t have to give him the lower rate?

If stalling is the case, what type of action can he take to resolve this issue?

He is trying to get this at 4.8% which is what he was told they would do. This is actually the 2nd house he has put an offer on and was accepted. He is working with a different bank this time.

On the first house the bank messed around and came back to him and said we can not do this for the lower interest rate we told you due to it has been 30 days or so and now we are going to have to ask you for more. I don’t know the exact numbers on this myself but it was almost 2% higher if I remember correctly which would bring the payments to an amount he could not afford. He had also put down $2000.00 earnest money. On this fist transaction he said forget it I'm not taking the higher rate, you told me it would be lower! By turning down the higher interest rate he also said he lost his earnest money even though when he made the offer he was quoted the lower interest rate.

Is this normal or should he have got back the earnest money?

Any input would be great.


I hope you all are having as much fun as I am and good luck!

Have a great day!


Earnest money

That is a great question, remember that when involved in a real estate transaction, you must understand the contract and all contingencies. Generally in a real estate contract (when working with realtors and professional contracts)your contingencies have time limits - they are only good for so long. So if your friend had a 30 day contract he probably had a 15 day financing contingency. This contingency would state that he would attempt to obtain financing at his terms and if he was unable to get his terms or financing all together then he could cancel the contract and recieve his money back as long as he was within his 15 day period. Accompanying his cancellation would be a denial letter from a lending institution.

It appears through your post that he was actually approved but the lender failed to perform, ultimately it is the buyers responsiblity to obtain financing or work with an approved lender that has a good reputation. After their contingency period is exhausted they are stating that they are following through with the contract and at that point their earnest money is at risk.

Personally, I have always protected my clients that I work with in having their financing contingency extend to the date of closing. If you are in need of financing to purchase a property, that is the safest way to protect your earnest money. The realtor should have explained that the earnest money would be at risk near the end of the contingency period, and had them check in with their lender. At that point, they would have to make the decision if they wanted to continue onward with the deal or not.

My recommendation would be to find another realtor that can operate as a buyers agent, ensure that they help you, educate you and protect you. Second find an established lender that comes with recommendations. Ensure that you are preapproved financially with them prior to placing an offer, make sure that they understand all of the timelines in the contract - never leave your responsiblities in a contract for someone else.

This particular buyer can appeal to the good nature of the seller and beg for their money back, trying to explain that they tried to operate in good faith - but remember that earnest money is for this case in particular. If a buyer does not live up to the contract the earnest money is to compenstate the seller for the time their home was off the market. I hope that this information helps!


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Well Explained salden

That's one good direct to the point explanation courtesy of salden. Buying a property could sometimes (if not most of the time) complicated. I was also told that whatever rate was presented on the GFE (Good Faith Estimate) and you're already satisfied, try your best to Lock the rate right away with the lender, 30 or 45 days. I'm not sure but this is also an advice given to me by somebody. LA


Everytime you repeat the words "I CAN DO IT" with conviction, you cancel or override your fear and increase your confidence. By repeating this affirmation over and over, you can eventually build your courage and confidence to the point where you are unafraid. -Brian Tracy-