by Matt Baggett

Recently we had an issue pop up due to the embedded verbiage in the TAR Purchase and Sale Agreement, or the Contract, that usually doesn’t affect the contract to close verbiage. It doesn’t affect anything because usually no one is calling for its’ enforcement.

Here it is, line 108-111 on page 2:

(1) Within five (5) days after the Binding Agreement Date, Buyer shall make application for the loan. Buyer shall immediately notify Seller or Seller’s representative of having applied for the loan and provide Lender’s name and contact information, and that Buyer has instructed Lender to order credit report and appraisal via the Notification form or equivalent written notice:

I am not an attorney by any means–but I believe this verbiage regarding the appraisal is most often ignored by all parties and wonder how it should actually be worded to make this part of the purchase and sale agreement more in line with reality.

For example, most real estate agents or Realtors have often already had their client apply for the loan. They know that they are pre-approved before they even write the contract. If they haven’t–then this is a good place to insure that they do have their client do it.

But why would we have the lender order the appraisal before the home inspection is completed and repairs negotiated? Most contracts are written to give anywhere from 7 to 15 days to conduct the home inspection and repairs. What if the buyer and seller cannot come to agreement on the repairs? If the appraisal was ordered within that first five days AND the appraisers work load was light and he/she immediately went out and conducted the appraisal AND the buyer and seller hadn’t even agreed to go forward or not on the contract yet…..why stipulate that the appraisal has been ordered, which could lead to a situation where it not only has been ordered but DONE and then the buyer walks because issues uncovered during the inspection process?

It could be a situation where the buyer isn’t going to buy the house, is out not only $350 or so on the inspection, but also $450 more on an appraisal.

Most of the time that time period is “overlooked” until after inspection–however, a listing agent technically could insist that it be ordered within those first five days after Binding Agreement.

Another imperfect document, created by imperfect human vessels, to remedy an imperfect world. We work with what we got!