I’m taking a sweep of this week as I enjoy a day out of the offices, watching sideways rain & wind, noticing the still ever present beautiful Fall colors – all from Storyville Coffee Co in Queen Anne – next up, a massage – to kick off this wacky Seattle weekend. Every now and again I grab a day outside of our six offices, outside of being mom, wife friend, daughter, sister etc…and have a “retreat with myself”. And yes, I still write. Why? Because I actually love to do this. It’s not work for me. It is in my fun category. Ok six, let’s take a quick sweep of this week and prepare for next, together…
The “science” – thru September 16 2016 | Of particular interest this week is to shout out our newly formatted statistical reports. Alongside these newly formatted reports, the normal reports remain as we look to improve on all. You’ll notice significant graphical enhancements along with improvements in actual data + talking points. Our In-City offices alongside our Eastside counterparts are working in partnership to improve all going into 2017…and you can help (if market “science” is your thing)! I want your feedback. How? ***Please consider sending me (via email) PDF of reports marked up with suggested changes…Click here to take a look, test drive, digest, use and consider providing me feedback! (metro Seattle)
Click here for NWMLS specific area reports. NOTE: Individual NWMLS areas reports will be available in 2017 with the new formats.
Legal Q & A, October | For those of you who follow along our printed newsletters in your offices – there is always a monthly legal Q & A from Demco. If you haven’t found the “answer” just yet for October’s question – drum roll please – here you go!
Q. To make an offer more attractive to Seller, Buyer’s broker crosses out paragraph 7 “Appraisal Less Than Sale Price” in the NWMLS Form 22A Financing Addendum. The offer is accepted. The lender’s appraisal comes in $50,000 lower than the agreed sale price. Because of the low appraisal, the loan does not get final approval and the sale fails. Who gets the Earnest Money?
A. Some brokers believe that if paragraph 7 of Form 22A is crossed out, and if a sale fails because the appraisal comes in low, the financing contingency is no longer operative and Seller should get the Earnest Money. That is not true. In the above scenario, if Buyer timely applied for a loan and otherwise complied in good faith with their obligations, Buyer should get the Earnest Money back. With Form 22A, if the loan fails for any reason, other than Buyer’s non-cooperation, Buyer is excused from their legal obligation to close. Paragraph 7 of the Form 22A provides some options in the event of a low appraisal. The end result may be either a reappraisal and sale at the original price, a lower price, or termination of the agreement. Merely crossing out paragraph 7 does not eliminate the financing contingency stated at the beginning of paragraph 1.a. of Form 22A: “This Agreement is contingent on Buyer obtaining the following type of loan or loans to purchase the Property …”. Without paragraph 7, a low appraisal kills the loan, and Buyer who has acted in good faith can walk away with the Earnest Money.
If Buyer and Seller desire that Seller gets the Earnest Money if a loan and a sale fail because of low appraisal, use WRE Form 41, paragraph 3:
“NWMLS Form 22A, Paragraph 7, Appraisal Less than Sale Price. NWMLS Form 22A is modified as follows: Paragraph 7 of NWMLS Form 22A Financing Contingency, Appraisal Less than Sale Price, is deleted in its entirety. Buyer may not terminate this Agreement or obtain a refund of the Earnest Money, if any, in the event Buyer is unable to obtain the Loan and the sole reason for Buyer being unable to obtain the Loan is due to Buyer’s lender’s appraisal of the Property being less than Purchase Price.”
Buyer needs to understand that agreeing to this language means their Earnest Money will be lost (or other Seller remedies apply if “Seller’s Election of Remedies” was selected in Default paragraph of sale agreement) if the appraisal comes in low and they cannot pay the full Purchase Price from some source other than the loan they applied for.
Ink it! | Save the date, January 23rd 2017 – yes, a while off yet I’ve inked this date for our six office 2017 Kick-Off. Excited to begin promoting the focus and format. For now, think “TED talk” style, clock hours around recent law suits and fun – we’ll focus on “Ideas Worth Spreading”. Save the date, we’ll do the rest.
Ok, next up – a much needed massage. Stay safe everyone! Shout if you need anything. Happy to help – the ultimate goal. Here is hoping to see a few rainbows between storms this weekend!
Laura Smith, General Manager | Windermere Real Estate Co + Northwest, Inc.