Transactions by Beth - Loan Approval Notice

When Silence Nearly Cost the Deal: A Cautionary Tale About Loan Approval Notifications

In real estate, even experienced agents can find themselves in murky waters when one key detail gets missed—especially in Florida, where the contracts are clear, but the consequences of inaction can be costly.

Here’s a real-world story of how one missing notice nearly turned a financed deal into an unintended cash purchase—and how it all ended well, but not without a few tense moments.

The Buyer Who Said Nothing

Everything seemed on track. The buyer had a pre-approval letter, was responsive, and loved the property. The seller accepted the offer, and the parties were moving forward under a Florida AS IS real estate contract with a financing contingency.

The buyer had 25 days to secure loan approval and provide written notice to the seller per Paragraph 8(b) of the contract.

As the Transaction Coordinator for the listing agent, I sent a timeline of critical dates to the buyer's agent and clearly marked the loan approval deadline on our calendar.

✅ Appraisal? In and on time.

✅ Lender updates? All positive.

But when the loan approval deadline came and went… one thing was missing:

❌ No written notice was delivered to the seller.

What That Meant — And Why It Mattered

Under Paragraph 8(b)(v) of the Florida AS IS contract:

If the buyer fails to timely deliver any written notice provided for in Paragraph 8(b)(iii) or (iv) to the seller prior to expiration of the Loan Approval Period, then the buyer shall proceed forward with the contract as though it is a cash transaction unless the seller elects to terminate the contract by delivering written notice of termination to the buyer within 3 days after expiration of the Loan Approval Period.

So what does that mean?

❗️The buyer becomes a cash buyer unless the seller delivers written notice terminating the contract within the 3-day window. If the buyer loses the protection of financing, and if the loan falls through later, the deposit may be at risk.

The Seller’s Choice

Faced with the facts, the seller had a decision to make:

• Cancel the deal within 3 days of the missed deadline, or

• Let the contract proceed—understood as a deal with no financing contingency

With the appraisal in hand, positive lender reports, and closing only days away, the seller chose to move forward.

Translation?

The contract continued—but without a financing safety net.

The buyer would now be expected to perform, with or without loan approval, since the seller did not terminate during the 3-day window.

And the buyer didn’t know.

The Buyer's Agent Had No Idea

When the buyer’s agent—a veteran in the industry—was notified that the seller was moving forward without a financing contingency, she was caught completely off guard.

She assumed the lender had notified the seller of the buyer's loan approval.

📪 No formal notice by the buyer + no seller termination = buyer proceeds without a financing contingency.

Fortunately, the loan came through, and the closing went off without a hitch. But it could’ve gone very differently.

Takeaways from a Close Call

This situation was a sobering reminder that:

• The contract doesn’t care why written notice wasn't provided
• Silence isn’t neutral—it can be legally consequential
• Even experienced agents can overlook or misunderstand key deadlines and contract language

It also reinforced the importance of:

✅ Tracking contingency deadlines
✅ Never assume, send written notices on time
✅ Understanding the contract’s built-in consequences

Pro Tip:

In Florida, the loan approval deadline isn’t just a target—it’s a trigger. If written notification of loan approval isn’t sent by the buyer on time, and the seller chooses not to terminate, the buyer proceeds without financing protection putting the deposit at risk.

Final Thought

This deal ended well—but it could’ve ended very differently.

Even in smooth transactions, one missed deadline can shift the risk entirely. No matter your role in a transaction, understanding deadlines and what happens if deadlines are missed isn’t optional—it’s contract-critical.

Q&A:

What You Need to Know About Loan Approval Notices in Florida

Missed loan approval written notices can have serious consequences in Florida residential real estate contracts. Here are some commonly asked questions (and answers).

Note: Always refer to the latest version of the Florida Realtors/Florida Bar contract and consult you broker or legal counsel for guidance on specific transactions.

What if the buyer gets loan approval but doesn’t send written notice to the seller?

The seller has 3 days after expiration of the Loan Approval Period to terminate the contract. If the seller does not terminate, the buyer proceeds under the contract without a financing contingency.

Does an email from the lender count as notice?

No. The buyer or their agent must deliver written notice to the seller or seller’s agent. Lender emails don’t satisfy the requirement.

Does a text from buyer's agent meet the notice requirement?

No. All notices must be in writing and may be made by mail, in-person delivery or electronic media (fax, email).

What happens if the loan later falls through?

If the financing contingency has been waived (either intentionally or by failing to give written notice), the buyer may lose their deposit if they’re unable to close.

Can failing to give written notice this be avoided?

Yes. Set firm calendar reminders to monitor and track, confirm delivery of written loan approval, and document every step before the loan approval deadline.

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