. . . . Or One
Realtors representing Sellers (better known as “listing agents”) tend to be a lot more focused on Written Statements — and specifically, Written Statement deadlines — than their clients.
There are two reasons for that: 1) it can be a technical subject (see below); and 2) most Buyers’ lenders meet the deadline, so there’s no problem — and no need to concern the Seller.
However, that hardly means that the Written Statement deadline is trivial.
On the contrary, I refer to it as “the second most important date in the Purchase Agreement” — at least in a financed (non-cash) deal.
That’s because it signifies when the Buyer has received final underwriting approval from their lender.
Not incidentally, it’s also the point in a deal when the Buyer’s earnest money become non-refundable — that is, if the Buyer subsequently fails to close, the Seller keeps the money as liquidated damages.
Two Criteria; “The Golden Rule”
At least in Minnesota, the Written Statement is supposed to recite two things:
One. The lender has done an appraisal on the home (their collateral, in the even of default), and the appraised value supports the mortgage amount; and
Two. The lender has finished vetting the Buyer’s finances, and deemed them creditworthy.
Typically, that means reviewing the Buyer’s W-2’s (or 1099’s if they’re an independent contractor); recent tax returns (usually, last two years); bank and financial statements; and basically anything else the lender requests.
In other words, the housing market version of The Golden Rule: “whoever has the gold (mortgage money), makes the rules.”
And yes, to Buyers, it can feel very much like being scrutinized under a (financial) microscope.
Too complicated?
There’s also a one word Written Statement that works equally well: “Approved!” (ideally, signed and on the lender’s letterhead).
See also, “Written Statements and Pre-Approval Letters“; “Pre-Approval Letters and Written Statements”; “Do a Real Estate Deal on the Back of a Napkin? You Could“; “You Mean, There’s No Deal AND They Get Their Earnest Money Back?!?”; and “The Second Most Important Date in a Home Sale.“
