I’m going to call it contract madness or “you’d better please all of the people all of the time or you and your FHA and VA loans will find yourself kicked to the curb with a rubber-stamped DO OVER on your forehead.”
Without further delay, here are the latest hot button issues we are hearing regarding real estate contracts:
- Issues with legibility – If it can’t be read, you’re out. FHA and VA will not insure loans if they can’t read the property contract, they will make you write it over again.
- Issues with contract name mis-matches – The names on the contract need to match the names on the loan; down to the middle initial, (i.e. Wile E. Coyote, Super Genius needs to appear everywhere).
- Issues with noting the seller of record – Writing Owner of Record will no longer cut it…the name has to be consistent on everything from the title company’s paperwork to the tax records. And in the case of VA loans, the name has to appear as it does in their Certificate of Eligibility. (An underwriter also told me that anyone on the sales contract has to be on the loan and vice-versa.)
- Issues with the FHA Addendum – While FHA does a background check on the parties listed, the listing agent and the buyer’s agent MUST sign the addendum or else it’s back to the fax machine.
Now anyone who has bought or sold a home knows that the contract gets faxed back and forth during the price negotiation and when dates get changed and when various addenda are added and adjusted. And now you also know that if you forget the E. in Wile E. Coyote, you’re beating a path back to the copy room as the clock continues to tick.
At the end of the day, we’ve gone to Infinity and Beyond with dotting I’s and crossing T’s – we are now in the no hiccup zone.