Home Selling in Oregon>Question Details

Davidzdragon, Home Seller in Oregon

does a seller have to sign an FHA amendatory clause?

Asked by Davidzdragon, Oregon Sat May 14, 2011

This form allows the buyer to back out of the sale without penalty. Does the seller have to sign this form?

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If you want to sell the home to a buyer that is using a FHA loan you will have to sign the form. Just keep in mind that people use FHA everyday to finance homes and worrying too much about the contents of the form will just add unnecessary tension. People don't make offers on homes they don't want to buy and if you have a good pre-approval letter from a reputable lender you'll be just fine.

Congratulations on finding a buyer.
3 votes Thank Flag Link Sat May 14, 2011
Yes it is a required disclosure without it the lender will not fund. The main reason is that the FHA has certain requirements of properties that it will lend on and this protects the buyer from losing any earnest money should the property not qualify. The VA also carries a similar clause in it's required disclosures. USDA may also as well but I would have to double check to be certain.
2 votes Thank Flag Link Sat May 14, 2011
Although, it might be mandatory, it does specifically state that it gives the purchase the privilege and option of preceding if appraises. How about this? Rewrite it to state that if home does appraise above offer price, then the seller also has the privilege and option of raising the price. It seems that this form that favors the buyer only.
1 vote Thank Flag Link Wed Jun 12, 2013
Only if you want the buyer you are working with to be able to close escrow. As was stated, an fha lender will not fund without that being signed. You can decline signing it and wait for a nother buyer though. That would be your call!
1 vote Thank Flag Link Sat May 14, 2011
If the buyer is using FHA financing, then this form must be signed by both parties. No way around it, unless you find a buyer not using FHA. Good Luck to You!
0 votes Thank Flag Link Thu May 19, 2011
When purchasing with an FHA loan, the only time the seller DOES NOT have to sign the Amendatory Clause is when it's a REO property (REO properties are owned by HUD, a bank or another entity that foreclosed on the property.) Also the Real Estate Certification (which commonly goes hand in hand with the Amendatory Clause) is not required for HUD-owned properties but IS required for all other REO properties.
0 votes Thank Flag Link Sat May 14, 2011
Hi David,

Yes, it is a required form.

Best regards,

Elva Wormley
Cobalt Financial Corporation
0 votes Thank Flag Link Sat May 14, 2011
The answer is yes. The purpose of the form is to protect the home buyer from overpaying for a property.

The FHA Amendatory Clause states that if the buyers have not received information about the appraised value of the home they intend to buy, then the buyers are not obligated to purchase the home.

What that means is if the required appraisal information is not delivered per the terms of the clause, then the buyers shall not be required to forfeit earnest money they have deposited for a house if they elect not to buy the house.

Further, the buyers cannot be forced to follow through with the purchase of the home in the event that the property does not appraise for at least the sales price, no matter what language the rest of the contract contains.
Web Reference: http://Lew.BestChoice.net
0 votes Thank Flag Link Sat May 14, 2011
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