QUESTION
I have several lenders that are asking me about the new contract…..they are wanting clarification on the FHA addendum. They are telling me that the FHA addendum has a clause that if the house does not appraise then the buyer can walk from the deal and get their money back. Does this conflict with the due diligence? There isn’t an appraisal contingency any longer so if the house does not appraise during the due diligence period will the buyer get both the due diligence money AND the EMD back or will they only get the EMD back? I would assume they would only get the EMD back and seller keeps the due diligence but before I answer any of these people I thought I would go to the expert.
ANSWER
This situation very interesting. If the revised NCAR OTPC has the FHA addendum attached, the buyer receives a refund of any earnest money deposit if the house does not appraise after the due diligence date and prior to settlement. The seller keeps the due diligence fee because the buyer did not go to settlement. This question is being asked a lot these days. Since the FHA addendum is attached, the buyer does receive a refund EMD but not the due diligence fee. The FHA Addendum may be viewed at ncrealtors.org
Let me know what other questions you are hearing.
Best regards,
Bill
