. . . . 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.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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