Mechanics, Strategy, and Realtor Relationships
Purchase business differs from refinance in every important way: faster timelines, more parties, more emotion, and more things that can go wrong. Reading the Purchase Contract Key items to pull immediately: Purchase price (your loan amount foundation), earnest money deposit (EMD), closing date (your deadline), financing contingency and its deadline, seller concessions, and inspection contingency status. Seller Concession Limits by Loan Type Conventional LTV > 90%: 3%. Conventional LTV 75–90%: 6%. Conventional LTV < 75%: 9%. FHA: 6%. VA: 4% plus VA-allowable costs. USDA: 6%. Seller concessions do not reduce the loan amount — the appraised value must still support the purchase price. The Concession Strategy Rather than offering $375,000 with no concession, consider offering $382,000 with $7,000 seller concession. If the appraisal supports the higher value, the buyer's out-of-pocket cash drops significantly while their monthly payment increases only marginally. This trade-off analysis is a service most LOs do not provide. The Appraisal Timeline Order the appraisal immediately after application — the same day. Every day of delay is a day added to your close risk. When the appraisal is ordered, scheduled, and received — tell the borrower and Realtor each time.