Financing contingency time limit?

[Asailorshort]

Turning to the wisdom of all you fico'ers, hope you can help.
Sellers have accepted our offer (money wise) but have countered with the contingencies that 1. We close on 29 August and 2. 'Financing contingency of 20 days'
My question is what does 'financing contingency of 20 days' mean? Secure preapproval? Have final financing approval?
I guess I just don't understand how the financing date can be a contingency, because we don't really have any control over WHEN things happen.

[tunseeker1]

Did you have your financing started before you wrote the offer? Most people start with financing applications and get approved for the loan then look for the house. After you offer the house then has to meet the loan conditions for things like value.

[Walt_K]

I think it means you need to give them a loan commitment letter within 20 days.  If your lender has issues getting it to you before the 20 days, you could always try to negotiate for an extension.  If the alternative is that you have to exercise your contingency to cancel the contract, that isn't really in their interest either.  Most people will be reasonable about these sorts of things.

[RJA]

Two Most Common Types of Financing Contingencies

 The most common financing contingency is pretty straightforward, and puts the primary burden upon the buyer:

This clause states that the home BUYER has a specified number of days to apply for, and secure a firm loan commitment from a bank or other type of lender - one that has been fully underwritten. (This is NOT a pre-approval - rather, this is when the loan underwriting process has taken place.)

If the BUYER surpasses the financing deadline without terminating the contract or requesting an extension (which the seller must agree to in writing), then the BUYER has automatically waived the contingency - meaning, the buyer has just committed to producing all the funds required to purchase the home, whether the loan is ultimately approved or not.

Obviously, this type of contingency is pretty cut and dry... meaning you had better pay close attention to the calendar and make sure you are counting the days properly - business days versus calendar days.

The second most common type of financing contingency is a bit more complicated - and puts more of the burden upon the home seller:

In this scenario, the financing contingency addendum states that the SELLER has the right to terminate - but only after an agreed upon number of days passes, AND only after serving notice to the buyer that the seller “may” choose to terminate the contract at any time after delivery of such notice.

Thus, if the SELLER does not serve this notice after the specified number of days in the contingency, the financing contingency remains in place, all the way up to the date of closing. Think of this notice like the SELLER waving their arms and asking “hey... what’s up with your financing?” If the buyer has arranged financing, then they simply need to provide evidence of such, and the contingency is then satisfied. If however, the buyer does nothing after (and if) receiving this notice, then they are at risk of the home seller terminating the contract at any time.

[Asailorshort]

Thanks for the responses. I *think* i understand it better now.
It seems like the seller was right to be worried about our financing. Nfcu is now not able to pre approve us for a va loan, due to delayed occupancy. We got overconfident when we got 'pre-qualed' for $425k (& telling them we wouldn't be able to move in for months) and thinking getting 115k would be a breeze, we put an offer in. Unfortunately, once we got ahold of loan processor (after 3 days of calling), we found out that our delayed occupancy would be a deal breaker. We're exploring a couple other options, but this home likely wont be available once we get our pre-approval, but i'm trying not to worry about it. Everything happens for a reason .