It is critical that all parties read and fully understand the addendum and how it will impact the transaction. Inspection periods and loan commitment items are described carefully in the addendum and DO DIFFER from the AAR (Arizona Association of Realtors) contract. Some of the critical differences include, BUT ARE NOT LIMITED TO:
FNMA does not sign the AAR HOA Addendum to the purchase contract; regardless of any boxes that may be checked on this addendum and signed by purchaser, seller will pay ONLY the HOA Resale Disclosure lnspection fee along with any delinquent dues owed; they will not pay any other fees that the association may require at closing. This would include the transfer fee.
Paragraph 3 puts a time limit on the mortgage loan commitment which is much different that the AAR contract. If the lender has an underwriting issue after that date, the purchaser could lose their earnest money. Additionally, the purchaser guarantees the lender will fund by the closing date (section 3(b)). Note, most Escrow agents must be allowed approx. 24 hours, from receipt of loan docs, to process documents and schedule appointments. YOU MUST ALLOW A MINIMUM OF 72 HOURS FOR FNMA APPROVAL OF HUD-1 BEFORE CLOSING CAN OCCUR.
INSPECTION PERIOD BEGINS AT ACKNOWLEDGEMENT DATE. Paragraph 5 of the addendum clearly outlines the inspection period terms. This is generally verbal acceptance from the listing agent and that is when your 10 day inspection period begins.
Paragraph 6 of the Addendum is where "The Purchase acknowledges that the closing on this transaction shall be deemed the Purchaser's reaffirmation that the Purchaser is satisfied with the condition of the Property and with all repairs and treatments to the Property and waives all claims related to such condition and to the quality of the repairs or treatments to the Property".
Paragraph 18, all parties agree and understand these are foreclosure properties. There are potential title Issues. IF THE SELLER CANNOT PROVIDE A CLEAR TITLE, THEY HAVE THE RIGHT TO EXTEND THE CLOSING DATE OR TERMINATE THE CONTRACT. If cancelled, earnest money will be refunded to the purchaser (Section 15 and 18).
Names of purchaser(s), at closing, must match exactly to what is submitted on original contract and addendum; any changes must be re-submitted to seller (thru listing agent) prior to close; any name variation not previously approved will delay the closing or possibly negate the sale.
Paragraph 23 requires the re-keying of the property prior to closing at purchaserâ€™s expense. This charge will be on the final audit and paid thru escrow to vendor chosen by listing agent.
The lenderâ€™s Real Estate Purchase Addendum supersedes the AAR contract and in the event of conflict, the Addendum will prevail.