You raise a key point that many buyers overlook when making an offer. Because sellers are eager to know that their house is really sold, typical agreements of sale used in this area requires the buyer to apply for a particular type of mortgage within a specific timeframe. For example, a buyer agrees to apply for a 30 year fixed mortgage at 4.5% to 6.5% interest within 10 days of the execution of the agreement. The mortgage commitment letter is due so many days after that.
But when a buyer has a home to sell, and their buyer needs to give notice on a lease, or to arrive on a certain date to start a job, timing the closing date can prove challenging. School schedules, lender requirements and construction delays can all impact the delicate balance. Think dominoes! Honestly, it’s amazing how many houses change hands so smoothly!
In the past, lenders were willing to lock rates for up to 60 days without extra fees. That was usually enough time to close the transaction. In your case, since the sellers are asking you to wait until they find a home to buy, they could pay to extend the commitment. The cost is usually a quarter of a point (0.25% of the loan.) Make sure you know the cost before finalizing your offer.