Posted by Tim Fierro (Tacoma, WA) on April 05, 2002 at 21:42:40:
What I mean is that if you are selling, you are going to get people who are going to ask for a financing contingency that allows them xx days to obtain financing. If they don’t get financing in that time, they want their earnest money back and because of the contingency, they get it back. You as the seller can adjust those days to your advantage.
If someone comes to you with full price offer, $5k earnest money, no pre-approved letter, and asks for a 30 day finance contingency; you will probably take it. If they can’t get the finance in place within that time, the clause lets them get their earnest money back.
Your question was to have the buyer pre-qualified and how do you know they are. If they truly are pre-qualified, they will not object to cutting down that financing contingency to 10 days. The best is not to have a contingency at all so that if they don’t follow through with the deal, you can keep their earnest money. My statement was to have you collect a decent earnest money amount and a low days (no days) financing contingency. If they are pre-qualified, they won’t have a problem with it since they need the earnest money to lower their table funds needed on closing day, and they don’t care about financing contingency because they already have the financing all ready to go.
If they say ok, they really do have everything lined up.