Legal Question in Real Estate Law in Illinois

The seller is not really asking that you take a rate increase. If you lock a lower rate and are approved, you will be able to go with that rate. Instead, the seller is asking that the rate stated in the contingency in the contract be higher. The seller wants you to be committed to the transaction even if the rate you are able to get is a little more than you think you will be able to get.

For example, if I made you an offer and put into the contract that it is contingent on my getting a loan at a fixed rate of 1%, that would basically give me an automatic out to the contract since the contingency could not be satisfied. To avoid my tying you up for several weeks and then having me back out on the contingency, you might come back and say you want the rate stated in the contingency to be 4.5%.

If you have a clear indication that you can lock at the rate you inserted, that may satisfy the seller, but if the rate the seller is suggesting is not out of line, then it may not be a big deal. Discuss it with your closing attorney and loan officer.

It may be that you used a rate that is no longer realistic or the seller is simply concerned that rates are on the rise and that you will not get locked at the rate you are suggesting. So, the seller wants to make sure the property is not tied up in a transaction that will never get off the ground.