EARNEST MONEY RELEASE FOR AN VA LOAN
76430 DAYS IN TO AN EXECUTED CONTRACT FOR A VA LOAN. BUYERS HAD A 15 DAY OPTION PERIOD AND WAS ADVISED BY LENDER TO HAVE THE APPRAISER GO OUT BEFORE ANY INSPECTIONS WERE DONE. OPTION PERIOD HAD EXPIRED ABOUT 15 DAYS. APPRAISER DID NOT SAY ANYTHING ABOUT THE SEPTIC SYSTEM FAILING. THE BUYERS HAD AN SEPTIC SYSTEM INSPECTION DONE AND STATED THE SYSTEM WAS RUNNING ON GROUND. OWNER IS AN ELDERLY LADY AND HAS NEVER HAD SEPTIC SYSTEM MAINTAINED BY PUMPING IT OUT. IT COULD BE RESOLVED BY HAVING SYSTEM MAINTAINED AND PUMPED. THE PROSPECTIVE BUYERS ARE WANTING TO TERMINATE CONTRACT AND RELEASE THE EARNEST MONEY TO THEM EVEN THOUGH OPTION PERIOD IS UP AND OVER 30 DAYS THE CONTRACT HAS BEEN EXECUTED. MY SELLER DOES NOT FEEL LIKE THE PROSPECTIVE BUYERS HAVE THE RIGHT TO THE EARNEST MONEY. I'M NEEDING ADVICE ON THIS SITUATION. THANKS ANN MARTIN, REALTOR
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DislikeWill the appraiser pass the system if it is pumped? You need answers to these questions before a decision can be made. Also, talk to your broker.
Third Party Financing, 2nd page -- Approval of Financing, has 2 parts: (1) Buyer Approval and (2) Property Approval. Septic system issues can affect Property Approval, especially when there's a VA loan involved. It is highly likely that buyers' lender will require a septic report showing the system is functioning properly. If that cannot be achieved, buyer may not be able to get Property Approval, the second part of Financing Approval. Copied from 6.B(2), Third Party Financing: "If Property Approval is not
obtained, Buyer may terminate this contract by giving notice to Seller before closing and the earnest money will be refunded to Buyer."
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