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What happens if the buyer's loan is denied?
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If the loan is denied the buyer has the option of trying to get alternative financing with a different lender.
The buyer has until the loan commitment deadline to terminate the contract on the grounds of a lack of financing. If the buyer thinks he might get alternative financing but is running out of time he might ask for an extension of the loan commitment deadline. In that case we will have to decide if we think it likely that the current buyer will be successful in his quest to obtain financing.
If we conclude that he is unlikely to be able to obtain financing it is best to not grant the extension and have the buyer terminate the contract. That way you are free to put the property back on the market. If the prior buyer in the meantime successfully negotiates financing and the property is still on the market he can present a new contract that you may or may not accept. |
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