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May 9, 2017  -  Stay Connected!

QUESTION:  If a buyers Form 22A (Financing Contingency) says that buyer is getting a Conventional Loan with 10% down but then buyer applies for a Conventional 5% down loan, is this a change in loan type which would then waive their financing contingency if they didn't notify the seller and never got written consent?

ANSWER: It is not technically a change in loan type but the outcome is the same. Buyer's financing contingency excuses buyer's performance of the PSA if buyer makes a good faith but unsuccessful effort to obtain the agreed financing, which, in this case, is a 10% down conventional loan.
Buyer never applied for the agreed loan and therefore, will never be able to show that buyer made a good faith effort to obtain the agreed loan. To the contrary, buyer made NO effort to obtain the agreed loan. Rather, buyer made application for a loan for which buyer has no financing contingency.
If this buyer fails to timely close the transaction, the buyer's financing contingency will not protect buyer, based on the facts presented.
This outcome should not be confused with a scenario where a buyer ultimately chooses to put more down than originally established in the financing contingency. A buyer's good faith effort to obtain a loan may always include buyer choosing to put down more than required. The problem in this situation is that buyer made a loan application based on buyer putting down less than buyer represented to seller. The reduced down payment reduces the chance that buyer will obtain financing and that information could have impacted seller's choice of buyers.


The Legal Hotline Lawyer does not represent Washington REALTORS or its members. To browse through our database of past Q & A's, visit Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the Week. Please submit questions to . Please tell us your NRDS number when you e-mail the Hotline with your question.


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Millennials Finally Flee Parents' Homes
(Source: REALTORMag - Daily Real Estate News) The pace of young adults leaving their parents’ homes is accelerating significantly, Fannie Mae’s Economic and Strategic Research Group notes in a new analysis. Young adults in their mid- to late 20s or early 30s living with their parents fell between 2013 and 2015—a period known as the economic recovery—much more so than between 2010 and 2012, when the economy and housing market were still recovering from the Great Recession, researchers note. [Read more...]

Almost 1,600 REALTORS® have spoken up - but we're not there yet!
If you haven't done so already, take action now! Washington REALTORS® has an active Call to Action on SB 5239, which addresses the impacts of the Supreme Court’s Hirst water rights decision, and SB 5254, which improves the Growth Management Act’s Buildable Lands Review process and provides funding for low-income and homeless housing programs. We need more participation! Please, take action now... and tell your Legislators that you stand for homeownership.

WA Real Estate Commission Opportunity Deadline Approaches
The Washington REALTORS® are encouraging interested members to submit a letter of interest, resume and a completed application to serve on the Washington Real Estate Commission. Applications can be obtained by accessing Governor Inslee’s web page at, and clicking on the Boards and Commissions link. [Read more...]

NAR Committee Application Deadline is May 23, 2017
Are you interested in getting involved at NAR? Now is the time! Find an area to serve that you are passionate about and apply today. Follow the link to update your member profile and apply to serve on a committee. [Read more...]

Seller Disclosure Statement Confusion
(Source: RE Magazine - Annie Fitzsimmons) Completion and review of the Seller Disclosure Statement, Form 17, happens (or should happen) in nearly every transaction. Yet, there seems to be confusion regarding whether particular seller groups are obligated to complete the Seller Disclosure Statement. Moreover, too many buyers are failing to understand the significance of the three different, and very distinct, buyer signature lines on the last page of the Disclosure Statement. [Read more...]

Primary Mortgage Rates Survey
(updated every Thursday)

Date Class Location CE  
17-May Into the Breach Dalles, OR 4 More info...
17-May CORE Dalles, OR 3 More info...
22-May Statewide Forms - Full Day Vancouver 7.5 More info...
24-May 2017 Legal Symposium Seattle 7.5 More info...
21-JuneAgency Law 3.5Olympia3.5More info...
21-June Best of the Legal HotlineOlympia4More info...
14-SeptDisclosure Requirements in RE Tri-City7.5More info...

QUESTION from 5/27/2016 -Buyer 1 pays for an inspection. Buyer 1 gives inspection report to Seller for use in getting inspection requests agreed to. Can a Seller give an inspection report away to a new buyer after the 1st deal falls apart?

ANSWER - The Seller Disclosure Act seems to say that seller is required to give the inspection report to the next buyer. There is a question on the Seller Disclosure Statement asking if a whole home inspection has been performed and if so, when. That question is asterisked. The asterisk means that seller is to attach related documentation. Most perceive this to mean that seller is required to attach the whole home inspection report if it is in seller's possession. That said, there are some in the inspection industry who argue that an inspector's reported findings relative to a property constitute copyrighted material. The findings are the unique province of the inspector, who licensed use of the material only to the buyer who purchased the report. This argument is buttressed by the language included on most inspection reports limiting the distribution of the report to the original purchaser of the report and prohibiting reproduction for any other purpose. There has been no challenge by the inspection industry to the Seller Disclosure Act requirement and no cases, to the knowledge of the Hotline lawyer, filed by an inspector seeking damages for unlawful reproduction of an inspection report. This issue is percolating behind the scenes at this point. If a seller is unsure as to whether or not a former buyer's inspection report should be attached to the Seller's Disclosure Statement, broker should advise seller to seek legal counsel. As should be evident from this answer, broker should not be telling the seller that attachment of the report is either required or not required. Broker's advice to this seller to seek legal counsel should be in writing, with a copy of the written advice retained in the firm's transaction file.
(You will need your NRDS# & password to access the Legal Hotline)
The Legal Hotline Lawyer does not represent Washington REALTORS or its members. To browse through our database of past Q & A's, visit Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the Week. Please submit questions to Please tell us your NRDS number when e-mail the Hotline with your question.