George Clements ~ Greenville, SC Real Estate
Paragraph 6 of the Contract for Sale is named "LOAN APPLICATION." The paragraph looks something like this:
6. LOAN APPLICATION: Purchaser agrees to apply for financing, as required above, from the Lender of his
choice within ____calendar days after the Effective Date and to provide all documents or information requested
by the Lender in a prompt and timely manner. At the time of application the Purchaser will advance the
necessary money to process any financing. Purchaser will take any reasonable action which is needed or
requested by the Lender to process the loan application. Purchaser hereby gives permission to Lender to
disclose pertinent information concerning the Purchaser’s credit-worthiness or any other information needed for
the loan processing to the Listing or Selling Broker(s) or Agent(s).
This paragraph is for those purchasers who are obtaining a loan and is basically saying that the purchaser needs to get the loan process going as soon as possible after the contract is complete. The loan process is one of the biggest things that need to happen from the time of completed contract to closing and usually takes the longest of anything. It is important to get this started so that the closing is not delayed. Normally, the blank is filled in with something like "5" calender days to do this.
The last sentence gives permission for the agents involved to get find out from the lender if the purchaser is financially able to purchase the property. This is important because a seller does not want to tie up the property under contract for a month or so only to come to the closing and find that the purchaser is not able to get financing. Most sellers want to see a preapproval letter before they even consider an offer. A preapproval letter can be obtained from any lender you are working with.