‘Time is of the essence’ is a contract clause used when an action must occur by a certain time or the deal is in jeopardy, such as the buying and selling real estate. The reality is, when dealing with funding sources, that time is of the essence for the entire transaction.
I have seen deals that seemed rock solid, collapse. The reasons for their demise didn’t come from any unsolvable disagreement or lack of information. Looking back, I see that many of them just simply took too much time.
When an applicant applies to a bank, there is a flurry of activity. Applications are completed, appraisals ordered, interviews conducted. There is a lot of information gathering as the bank prepares the loan package for underwriting. Once the package goes behind the curtain, the wait begins. Occasionally, requests for information will come from underwriting. If underwriting likes the deal, they’ll defend it to a loan committee and the deal is, or is not, approved.