Expert: Hans Weber, Licensed Broker Associate - 11/6/2003

Question
I recently sold my home and gave the buyer 10 days to obtain financing at 5.5%. He claims the best rate he was offered was 5.75%.

To prove good faith effort on his part, I would like proof that he was rejected from 3 lending institutions. Are there a certain document(s) from the lending institutions that I should ask him to obtain and forward to me?

Answer
Dear Anthony,

Your question has many facets and therefore many answers.

Usually a contract of sale for real estate would include a mortgage contingency with an amount at the prevailing rate and a time frame to get the mortgage commitment.  Including a specific interest rate in not as typical and if an interest rate were included then was the type of mortgage specified? such as 30 year fixed or could it be adjustable?
If your buyer was able to secure a mortgage at 5.75 and you want to sell the house to this buyer maybe you can buy down the rate by a quarter point and then the buyer would have the targeted 5.5%.  
The buyer should supply you with letters of denial from the lenders and you can then speak to the loan officers.
Does the buyer want the house or is the buyer trying to get out of the contract?
It seems if you both want to make the transaction happen you are close enough to make it work.
If not, then you will need to abide by the contract as written. Further advice should come from your attorney upon contract review.

Thank you for your question.

Hans