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It's interesting to see how a straight forward question about an appraisal contingency gets morphed into a criticism of a real estate contract, with wrong advice due to lack of understanding of the contract, and subsequent criticism of a Realtor. It reminds me of a kitten I had years ago that would hide behind a couch ready to pounce on me as I walked by.
It's interesting to see how a straight forward question about an appraisal contingency gets morphed into a criticism of a real estate contract, with wrong advice due to lack of understanding of the contract, and subsequent criticism of a Realtor. It reminds me of a kitten I had years ago that would hide behind a couch ready to pounce on me as I walked by.
Please site an example of my "lack of understanding of the (NCAR) contract"?
Which means the contract went immediately into the EM period, which IS NOT contingent on financing or appraisal.
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Yes, I have done contracts with no DD fee....The Due Diligence Period represented in the NCAR standard form 2-T Offer to Purchase and Contract is the Mother of All Contingencies.
The Due Diligence Period definitions make the entire transaction dependent on Buyer satisfaction regarding property investigation while in the DD Period or any negotiated extension of DD Period. DD in NCAR now is the sum total of all the contingencies that used to be listed in the Offer to Purchase and Contract. What was a list of separate contingencies with separate deadlines has been simplified into a list of buyer items of interest and one deadline.
And still, seller's obligations to deliver insurable and marketable title, convey property in same or better condition, perform acceptable negotiated repairs with right of reinspection, removal of sellers personal effects prior to closing are items which all survive DD Period expiration to protect buyer.
Of course, I have only heard as much from the lead attorney at NCAR, the president of the NCAR Forms Committee, and the Educator of the Year for 2010...
So, the buyer can terminate due to low appraisal, but lack of a specific label "Appraisal Contingency" means that the buyer does not have that right? Make material sense of that claim for me, please.
I think the expressed right of the buyer to terminate during DD, "for any reason or no reason," trumps any contingency you can label.
I made no error there whatsoever and did not do any spin, and any decent level of intellectual integrity would let one admit the clear materiality indicated in my post and in the standard agreement.
So, I admitted I erred when I said that listing agent did not have any claim on the EMD. Yep, I admitted it, nearly immediately.
And... Again, a decent level of intellectual integrity from someone who was not trying to mislead would demand a poster who is not trolling would note that fact when repeating my admitted error only for sophomoric melodramatic effect.
And, I still don't care about that clause, but have been fortunate that a disagreement over EMD disbursement has not been an issue in a transaction for me or clients to date. I am much more motivated by protecting clients from harm than by claiming funds from a failed transaction.
I am not going to get into the whole waterfowl thing. I have dealt with enough that is foul in this thread already.
My sincere advice is unchanged. Have an attorney read the forms to you, rather than suffer needlessly trying to grasp them without competent guidance.
I guess we have a different concept of a "contingency". My definition of a contingency is a term or condition that will not only release you from the contract but also allow return of all monies. Your definition of a contingency relies only on a parties ability to walk away from a contract, independent of their ability to recover their due diligence and EM. I agree, according to your definition a buyer has limitless contingencies to walk away from a contract, assuming they are willing to lose their money.
Pointing out your past innaccurate statements re: the NCAR is only fair since you have questioned my knowledge of the contract. Sorry if you feel this is "sophomoric".
Which means the contract went immediately into the EM period, which IS NOT contingent on financing or appraisal.
Not true.
There is no such thing as an "EM Period" within the standard NCAR Offer to Purchase and Contract.
DD Fee and amount are both optional and negotiable between the parties. DD Period is also optional and negotiable, and separately so from DD Fee. It is completely possible to have a functional DD Period without conveying a DD Fee to seller. The reason for the incorporation into the agreement of a DD Fee was due to the huge debate among the NC Bar folks regarding the possibility of creating an illusory contract in the absence of valuable consideration passing in exchange for a DD Period.
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Originally Posted by RE Skeptic
I guess we have a different concept of a "contingency". My definition of a contingency is a term or condition that will not only release you from the contract but also allow return of all monies. Your definition of a contingency relies only on a parties ability to walk away from a contract, independent of their ability to recover their due diligence and EM. I agree, according to your definition a buyer has limitless contingencies to walk away from a contract, assuming they are willing to lose their money.
Also, mostly not true. I might stipulate that your representation of your definitions could be true to your thoughts. We have no way to confirm, however.
Buyer retains the right to refund of EMD during DD period if terminating "for any reason or no reason." In the absence of a DD Fee, buyer has little risk, beyond the expense of due diligence. And Buyer has further recourse to recover all funds and costs of the transaction in case of seller breach, including the seller obligations mentioned earlier which survive the DD Period.
Which means the contract went immediately into the EM period, which IS NOT contingent on financing or appraisal.
I guess we have a different concept of a "contingency". My definition of a contingency is a term or condition that will not only release you from the contract but also allow return of all monies. Your definition of a contingency relies only on a parties ability to walk away from a contract, independent of their ability to recover their due diligence and EM. I agree, according to your definition a buyer has limitless contingencies to walk away from a contract, assuming they are willing to lose their money.
Pointing out your past innaccurate statements re: the NCAR is only fair since you have questioned my knowledge of the contract. Sorry if you feel this is "sophomoric".
I have to ask RE-S, I don't believe you've said if you are an attorney. Have you ever taken any RE Contract classes in NC or just using general assumptions on what you think they read ?
Most DD periods (we call it an Option Period) requires a Buyer to "Purchase" that option period. If you terminate during that contingency you do lose your Option Money.
Not true.
There is no such thing as an "EM Period" within the standard NCAR Offer to Purchase and Contract.
Call it what you want. In the NCAR contract, after the expiration of the DD period the EM becomes non refundable except for seller breach. During this “EM period” appraisal and financing are not contingencies for the buyer to retrieve their EM. Agree?
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DD Fee and amount are both optional and negotiable between the parties. DD Period is also optional and negotiable, and separately so from DD Fee. It is completely possible to have a functional DD Period without conveying a DD Fee to seller.
The DD period gives the buyer time to ponder the purchase which may include: inspections, appraisal and securing their financing. However, the buyer could theoretically do nothing during the DD period. The DD period is typically 2-4 weeks. During the DD the MLS status changes from “active” to “under contract” and showings drop off significantly. Most sellers are not going to effectively take their house off the market for 2-4 weeks without financial compensation. While it is theoretically possible to have a contract without DD monies, I think this is a highly unusual scenario in NC. DD typically range from $500-1000 which is paid directly to the seller and is non refundable.
So, getting back to my original point...the NCAR has no contingency for financing or appraisal.
Most DD periods (we call it an Option Period) requires a Buyer to "Purchase" that option period. If you terminate during that contingency you do lose your Option Money.
Correct, that is what I have stated in several posts. Not sure what your point is?
In Texas, the financing addendum only addresses appraisal on FHA and VA loans as those are government loans. There is no appraisal contingency on conventional loans... however, if the house doesn't appraise, it effects your financing, and that is a contingency right there.
so in texas, the financing addendum basically covers two areas then? 1) that you get approved for the loan 2) the appraised value should support the loan amount?
Im worried that i dont have an appraisal contingency but i have a financing contingency, and the issue i am facing is that i might have overpaid the property since i am competing with multiple offers. so what happens to the earnest money? it says somehting like for a certain number of days i have to tell them in writing and if i dont it wont be subject to the bank's lending requirements such as appraisal.
Thanks!
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