The Louisiana State Real Estate Contract has two important dates pertaining to the Sale of Property.
- Final Loan Approval
- Act of Sale
A realistic time frame to close on a home in Southwest Louisiana is 30-45 days. Before writing a contract for a Home Buyer, the Realtor should discuss the time frame with the loan officer. Most buyers have obtained what is known as a pre-approval from a mortgage loan officer. Depending on the type of home loan, the loan officer will usually advise the Realtor of the time frame needed to close.
The mortgage industry is changing everyday. FHA , VA and USDA loans all have specific guidelines and requirements. The loan officer is simply facilitating the loan for the Buyer, the home loan application is actually sent to an underwriter at a bank. The bank underwriter is the determining factor of the final approval of the home buyer’s loan.
- Foreclosure properties have a different set of rules. Because the bank owns the property being sold, many times the home. The lender may have met the contract deadline with loan approval but the close date can be delayed until the Seller on the other end of the foreclosure has approved the HUD. In this case, an extension to purchase has to be completed.
- VA loans- the VA is very thorough. They usually have alot of conditions that need to be met. The loan officer may ask for an extension until the home loan package clears the VA underwriter.
- USDA- Rural development loans go through two different departments. Once the loan clears underwriting, it still has to be sent to the local USDA office for approval of the loan. USDA loans are manually underwritten so depending on the file load, it can take some time to be released with a loan package to the title company.
No matter what type of loan, the mortgage loan officer will process the loan as speedily as they can. However delays do occur and Buyer and Seller should be aware of the time frames for each and your Realtor should keep you informed throughout the process.
No one likes to prepare an extension and it helps to be realistic when initially writing the purchase contract. If your Realtor knows the loan will be a USDA or VA loan it is wise to write the contract for a 45 day time frame. Same thing applies to HUD homes and foreclosures, more time is usually needed to process these types of loans.
Understanding Real estate extensions is important. Extensions do not mean the buyer is being denied, it usually is associated with more time in underwriting awaiting approval signature, this is just a sign of the times.
Real Estate Extensions are necessary to keep the contract binding.