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Weekly Membership Newsletter
June 5, 2018 • Stay Connected!
         

QUESTION:  Would the additional down provision in Form 22AD supersede the VA Amendatory/Escape Clause when the Buyer has applied for a VA Loan and the appraisal comes in low? The VA says that a Buyer may not waive the VA Amendatory/Escape Clause and that it is required in every VA transaction. Form 22AD states that it replaces the Appraisal Less Than Sales Price provision in Form 22A, but does not mention the VA clause, which seems to replicate paragraph 7b(ii) in Form 22A.



ANSWER:   Since a VA transaction MUST include the VA Amendatory Escape Clause, it is important to analyze the language of the clause to determine if it conflicts with Form 22AD. If it conflicts, then the two forms cannot be used in the same transaction.
 
The VA Amendatory Clause says that a VA borrower may never be obligated to pay more for real property than the appraised value. It goes on to say, however, that the VA borrower has the privilege and option of proceeding with the sale, and paying more than the appraised value. Because a VA buyer has the option to pay more, the clause does not appear to be in conflict with the language of Form 22AD.
 
Form 22AD replaces the language of the Form 22A Financing Contingency and says that if the property appraises for less than the purchase price, buyer agrees to bring $X to closing to make up the difference. It is up to a buyer to choose to include Form 22AD in the PSA. If buyer chooses to include Form 22AD, buyer is exercising buyer's "privilege and option" to pay more for the property than the appraised value. When a VA buyer includes a Form 22AD in the PSA, buyer will be obligated to perform the terms of the agreement in keeping with the obligation undertaken by buyer set forth in Form 22AD. IF buyer does not choose to exercise buyer's option and privilege to pay more, buyer should not include the Form 22AD.

 

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



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Commission Opportunity
Spokane Commissioner Cate Moye's second term will expire August 14, 2018. The Washington REALTORS® are encouraging interested members from east of the Cascade Mountains to submit a letter of interest, resume and a completed application to serve on the Washington Real Estate Commission. Contact Mary.Drury@warealtor.org for more information on how to apply
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Report: Higher Prices, Rates Are Unsustainable
(Source: REALTOR Mag) Recent income growth has not been enough to keep up with rising mortgage rates and home prices, according to a new report by Black Knight, a real estate technology and data firm. Rising home prices and mortgage rates have increased the monthly payment of a median-priced home purchased with a 20 percent down payment on a 30-year mortgage by $150 per month. That marks about a 14 percent increase since the start of 2018.
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Internet Trends Report
Mary Meeker reveals her internet trends report for the Code Conference. Review some key takeaways and slides from her presentation to stay up to speed on current internet trends.
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Looking for Client Content?
Houselogic has posted some great content you can share with your buyers and sellers, including step-by-step guides, first-time home buyer information, and more.
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Primary Mortgage Rates Survey
(updated every Thursday)  Source:  Freddie Mac
 
 May 31, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.56%  4.06%  3.80%
 Fees & Points  0.4
 0.4
 0.3
 Margin  N/A  N/A  2.77



 May 24, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.66%  4.15%  3.87%
 Fees & Points  0.4
 0.4
 0.3
 Margin  N/A  N/A  2.77



 May 17, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.61%  4.08%  3.82%
 Fees & Points  0.4
 0.4
 0.3
 Margin  N/A  N/A  2.77



 May 10, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.55%  4.01%  3.77%
 Fees & Points  0.5
 0.4
 0.3
 Margin  N/A  N/A  2.76



 May 03, 2018       30-yr FRM  15-Yr FRM  5/1-Yr ARM
 Average Rates  4.55%  4.03%  3.69%
 Fees & Points  0.5
 0.4
 0.3
 Margin  N/A  N/A  2.76

 
 UPCOMING CLASSES
Date Class Location CE  
06-JUN Water Rights & Water Supply IssuesOmak3.5More info...
07-JUN Water Rights & Water Supply IssuesWenatchee3.5More info...
13-JUN Code of Ethics in Real LifeChelan3.0More info...
13-JUNCode of Ethics in Real LifeE.Wenatchee3.0More info...
21-JUNThe Hotline Vs. The Bottom LineShelton3.5More info...
21-JUN To Disclose or Not to DiscloseShelton4.0More info...
26-JUN NAR Code of EthicsBellingham3.0More info...
27-JUN NAR Code of EthicsOlympia3.0More info...
29-JUN NAR Code of EthicsPuyallup3.0More info...
     


More Classes →



   
Heads Up! Code of Ethics Cycle Ending
REALTORS® are required to complete ethics training within two-year cycles and the deadline for the current cycle is December 31, 2018. Training may be completed through your local REALTOR® association, via one of upcoming WR webinars (stay tuned for dates) or you can take it online. A few online options include NAR's online training or Interact CE's Ethics Adventure
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Expires on: 11:59PM PST 06/30/2018 
Promo Code: RELAX  Expires on: 11:59PM PST 06/30/2018 Discount amount: 27%  Restrictions: Cannot be combined with any other offer. Can use as entire cart discount or individual products. Unlimited use until expiration date. Does not apply to Ethics Adventure products.