Can the appraisal contingency in the AAR Residential Resale Purchase Contract be waived if the buyer is financing the purchase with an FHA or VA loan?
No. Buyers obtaining FHA and VA loans are required to have an FHA/VA Amendatory Clause signed by the parties. This clause states that if the property fails to appraise, “the buyer is not obligated to complete the purchase of the property and cannot incur any penalty by forfeiture of the earnest money deposit.” As such, despite the purchase contract requiring a non-refundable earnest money deposit, the buyer can cancel for failure to appraise without risking his or her earnest deposit where the buyer is financing the purchase with an FHA or VA loan and the parties signed the FHA/VA Amendatory Clause.
Arizona REALTOR® Magazine – August 2013 |Contract-Contingency