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GAR Form of the Month
VA Loan Contingency Exhibit F410
With the potential NAR Settlement news, VA Loans have been getting a lot of discussion. In February, VA loans equalled 7.5% of all the contracts processed by my team. I'm interested to see if this goes up in the next few months. I'm leaving the Special Stipulation of the Month the new stipulation that GAR's legal counsel wrote to help VA buyers whose sellers aren't offering co-op commission. Let's walk through some other sections of this Exhibit.
Sometimes lenders don't want to communicate with agents. If you come across this issue, share this paragraph with the lender. The buyer has given them permission to share updates with the seller and the seller's representatives.
10. Authorization of Buyer to Release Information to Seller and Brokers. Buyer does hereby authorize Seller and the Brokers identified herein to communicate with the lenders with whom Buyer is working to determine and receive from said lenders any or all of the following information: (a) the status of the loan application; (b) Buyer’s financial ability to obtain the Loan(s) or other loans for which Buyer has applied; (c) whether and when Buyer provided the lenders with Required Information; (d) whether and what conditions may remain to complete the loan application process and issue of a loan commitment; and (e) the basis for any Loan Denial Letter.
In February we had 23% termination rate and 20% of those were for loan denials. Are you sure how to handle a loan denial? The Loan Contingency spells it out for you.
7. Use of Approved Mortgage Lender and Loan Denial Letter. If Buyer has agreed to apply for the Loan(s) with an Approved Mortgage Lender, the Loan Denial Letter must be from an Approved Mortgage Lender. If Buyer is not required to apply for the Loan(s) with an Approved Mortgage Lender, the Loan Denial Letter may be from any institutional mortgage lender licensed to do business in Georgia. A Loan Denial Letter from a non-institutional mortgage lender shall not be the basis for Buyer to terminate this Agreement. Notwithstanding any provision to the contrary contained herein, the Loan Denial Letter may not be based solely upon one or more of the following: (a) Buyer lacking sufficient funds other than the amount of the Loan(s) to close; (b) Buyer not having leased or sold other real property (unless such a contingency is expressly provided for in this Agreement); (c) Buyer not having provided the lender(s) in a timely fashion with all information required by lender, including but not limited to, loan documentation, Official Wood Infestation Reports, structural letters, well tests, septic system certifications, flood plain certifications and any other similar information required by lender (hereinafter collectively “Required Information”); (d) Buyer making purchases that adversely affect Buyer’s debt to income ratio; or (e) the lender not having completed underwriting the loan request. Buyer may terminate this Agreement without penalty based upon an inability to obtain the Loan(s) only if Buyer fulfills all of the applicable requirements set forth in this Exhibit.
It's common knowledge that VA appraisers can ask for repairs. Did you know that they can also require a home warranty on current improvements?
17. Home Warranty. If the improvements on Property are less than one (1) year old at the time of Closing, Seller shall, if required by VA, provide a home warranty certificate acceptable to VA at Seller’s Cost.
SS 619 BUYER REQUESTS SELLER PAY BUYER’S BROKER’S COMMISSION (VA LOAN)
Since under the VA Loan program Buyer cannot pay Buyer's Broker a commission, Buyer hereby requests and Seller hereby agrees to pay Buyer’s Broker _________________________________ as the total real estate commission due to Buyer's Broker at Closing. Nothing herein shall be interpreted as a request to alter, modify or change the commission to be received by Seller’s
Broker, if any, that Seller may have agreed to pay Seller’s Broker in any separate written agreement.
SS 620 BUYER REQUESTS SELLER PAY BUYER’S BROKER’S COMMISSION
Buyer hereby requests and Seller hereby agrees to pay Buyer’s Broker _________________________________ as the total real estate commission due to Buyer's Broker at Closing. Nothing herein shall be interpreted as a request to alter, modify or change the
commission to be received by Seller’s Broker, if any, that Seller may have agreed to pay Seller’s Broker in any separate written agreement.
Monday, May 27, 2024
Memorial Day
Wednesday, June 29, 2024
Juneteenth
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