Question Details

Jagdip, Home Buyer in Springfield, VA

Seller asked to sign VA escape clause at the day of closing

Asked by Jagdip, Springfield, VA Wed Mar 21, 2012

I am selling house to veteran and I was asked to sign VA escape clause at the day of closing. I was shocked to see that document at the day of closing. It amends the contract and let buyer get out of contract if appraised value is less than sale price. appraised value of our house came higher than sale price anyway. It would have made more sense to sign something like this when signing original contract. Why would i sign it on the day of closing when this document does not even make any sense anymore ( appraised value came out higher than sale price anyway). I refused to sign and closing company is asking forcing us to sign it because (according to closing company) lender will not issue loan without this document. does any one else experienced this before ?

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2
Love those underwriters. Every T must be crossed and all i's dotted. The loan package must have everything in it that is suppose to be there these days even if they have to be added at the last minute.
1 vote Thank Flag Link Wed Mar 21, 2012
Yes...this is standard operating procedure for government insured loans. VA and FHA insured loans do require this type of document in order to fund. If you had an agent, he / she should have informed you prior to closing that this document will be required as this is not a new requirement by any stretch. Since the appraisal came in higher than the asking price, it does not negatively impact you as a seller as long as the language specifically follows the VA required language.
0 votes Thank Flag Link Wed Mar 21, 2012
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