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June 17, 2014 | Stay Connected!

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questions to [email protected] or call (800) 562-6027. Please have your NRDS number ready when you call or

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REALTORS® members or their clients and customers. Research this topic and thousands of others online.

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Question:Recently, Form 22A, the Financing Contingency Addendum was revised to include a new paragraph at thebottom of paragraph 2. New Paragraph 2C says: "Appraisal Less Than Sales Price. Buyer's waiver of theFinancing Contingency under this Paragraph 2 will; or will not (will, if not filled in) constitute waiver ofParagraph 6 (Appraisal Less Than Sales Price)." What is the purpose of this new provision? How should itbe used?

Answer:Understanding this new paragraph starts with an understanding of paragraph 2 generally. Withinparagraph 2, seller is given the right to send buyer a Notice of Right to Terminate following passage of thespecified number of days after mutual acceptance. Upon receipt of the Notice of Right to Terminate, buyermay either waive the financing contingency or take no action at all. If buyer waives the financingcontingency, within three days following receipt of the Notice of Right to Terminate, the parties proceed toclosing and buyer no longer has the protection of the financing contingency.

If buyer does not waive the financing contingency, then following three days after delivery of the Notice ofRight to Terminate, seller may terminate the purchase agreement by giving buyer a Notice of Terminationbut seller is not required to give buyer any additional advance notice of the termination. Seller retains thisright to terminate without advance notice until such time as buyer waives the financing contingency.

All of this information is background for the answer to the question that was asked. The new sentenceaffects what happens if buyer waives the financing contingency. Prior to this new paragraph being added,when the buyer waived the financing contingency, buyer's waiver would include a waiver of the lowappraisal provision. Said differently, if buyer waived the financing contingency in order to keep seller fromterminating the agreement, buyer's waiver would waive the protection of the low appraisal provision. Ifbuyer thereafter received a low appraisal and could not get the loan as a result, buyer would breach thepurchase agreement.

This new paragraph allows the parties to negotiate whether buyer's waiver of the financing contingency,triggered by seller's delivery of the Notice of Right to Terminate, will also waive the protection of the lowappraisal provision. If the parties check the "will" box, buyer's waiver of the financing contingency will alsowaive the protection of the low appraisal provision. If the parties check the "will not" box, buyer's waiverof the financing contingency, will not waive the low appraisal provision.

More succinctly, checking the "will" box favors seller. Checking the "will not" box favors buyer. Prior toinclusion of this new paragraph, some buyer brokers would try to achieve the objective of the "will not"box by including a Form 22AA along with Form 22A in buyer's offer. If the parties agree to the "will not"box, then there is no reason for buyer to include 22AA in an offer that also includes Form 22A.

For a printer friendly version of this week's Legal Hotline Q & A, click here.


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REALTOR® Career HelpWe have scanned and selected interesting tips & tricks articles from a variety of industry publications so you don't have

to. Always check with your broker/owner to see if these practices fit within your company policies.

Social Media Cheat Sheet - Pts. 1 & 2This two part article, partly based off information brought to you from arecent Watercooler eipisode, offers up some really great strategies to helpyou not feel overwhelmed by social media. Part one talks about Fun withFacebook and the Power of Photos. Part two addresses ReputationManagement, Organization and Instagram Tips.

Sunrise App Lets You Connect CalendarsConnect Google Calendar, iCloud, Exchange, and more. In the latestrelease, you can connect Evernote, Tripit, Github, and more as well. Theapp also works with your Desktop. Read the review from Tech Crunch. Get Sunrise here: Desktop Access, GooglePlay, iTunes


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Top Stories

Pocket ListingsRecently, Legal Hotline Lawyer Annie Fitzsimmonswrote an article about the destructive force of PocketListings, a topic that's really gaining traction as of late. In her article, Annie discussed that the potential risksof pocket listings are great, possibly exposing brokersto license law violations and civil liability...

Homeowners Capitalize by Becoming LandlordsThe headlines of the last few months tell the story. Mortgage rates are still low and rent continues toclimb. And now homeowners are beginning to take advantage of the market conditions by becominglandlords...

Even though home sales decreased on a year over year basis,the average price of homes sold continued to increase.


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Mortgage

National Averages 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM

Average Rates 4.20% 3.31% 3.05% 2.40%

Change (from prior week) +0.06% +0.08% +0.12% ----%

Fees & Points 0.6 0.5 0.4 0.4

Margin N/A N/A 2.74 2.71

Regional Averages(West)

30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM

Average Rates 4.16% 3.25% 2.86% 2.13%


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Change (from prior week) +0.06% +0.06% +0.07% ------%

Fees & Points 0.6 0.6 0.5 0.6

Margin N/A N/A 2.69 2.67

Source: Freddie Mac - Weekly mortgage rates released every Thursday.

Freddie Mac's Primary Mortgage Market Survey

Government Affairs

Eliminating Discrimination in Calculation of Fees & PointsHouse Passes "The Mortgage Choice Act"The U.S. House of Representatives passed H.R. 3211, or "The Mortgage Choice Act." This Bill addressesdiscrimination in the calculation of fees and points under the QM rule. The Bill now heads to the Senate. REALTORS® continue to advocate for this legislation as it heads to the Senate in order to help clarify QMrules while protecting borrowers from risky loan products. Read NAR President Steve Brown's statementhere.

EducationFor your convenience, Washington REALTORS® Education offers both online education and live classes, including

webinars! To participate in a webinar, all you need is internet access and a phone. For more information, or to sign up

for classes, visit www.warealtor.org/education.

Coming Soon! Mark Your Calendars!Washington REALTORS® premier education event,edCON, is back and better than ever! Mark yourcalendars to attend this education conference andvendor showcase October 7th-8th, 2014 at theHilton Seattle Airport & Conference Center. Staytuned for more information!


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Upcoming Live Classes

JUNE 18 | Water Rights & Legal IssuesTRI CITY | 3.5 CEInstructor: Bill Clarke This class provides an overview of the water availability requirements for local governments related toapproval of land subdivision and building permit applications, and an explanation of the process to obtainwater supply either from existing water systems, through the water rights permitting system, or using aprivate well. The class also includes information on the water supply issues within the seller disclosure law,and how information on water rights can be obtained from the Department of Ecology.....REGISTER

JUNE 24 | Pinterest for REALTORS®WEBINAR | 3.5 CEInstructor: Terry Eccles-Pettet, ABR, CRB, GRI, ePro, REEA member Pinterest is fun! Pinterest is also a great social media marketing tool for REALTORS®. Why use Pinterest?Its the third largest social network after FaceBook and LinkedIn. Using Pinterest you can become betterconnected with your warm market, develop your digital persona, and share your expertise and interests ina non-spammy way. Come see what all this pinning is about......REGISTER

JUNE 26-27 | Certified Negotiation ExpertEVERETT | 15 CEInstructor: Pili Meyer, ABR, CRS, GRI, SRES, e-Pro Learn how to proactively plan your real estate negotiations for success by learning difference betweenwin-Lose hard bargaining vs. collaborative win-win negotiating. Learn how the brain makes purchasedecisions and how you can impact both sides of the brain in the decision making process and reviewscientifically proven persuasion approaches that increase your success rate at influencing others. This classincludes scripts for real estate negotiation situations that utilize these proven persuasionapproaches......REGISTER

More Upcoming Live Classes...

July 10 | Legal Aspects of RE Technology & Intellectual PropertyTRI-CITY | 4.0 CEInstructor: Doug Tingvall, JD, GRIMORE INFO OR TO REGISTER


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July 16 | Peas and CarrotsTUKWILA | 7.5 CEInstructor: Terry Eccles-Pettet, ABR, CRB, GRI, ePRO, REEA MemberMORE INFO OR TO REGISTER

July 17 | Current Issues - WebinarWEBINAR/OLYMPIA | 3.0 CEInstructor: Michael R. Schoonover, ALC, AuctioneerMORE INFO OR TO REGISTER

July 31 | CORE & More ORCAS ISLAND | 7.5 CEInstructor: Annie Fitzsimmons MORE INFO OR TO REGISTER

August 27 | VA & Military Real Estate Specialist (VAMRES) YAKIMA | 7.5 CEInstructor: Pili Meyer, ABR, CRS, GRI, SRES, e-Pro MORE INFO OR TO REGISTER For a complete list of classes, visit www.warealtor.org/education...

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Best of the Legal Hotline Q & A

QuestionBuyer and seller have already reached agreement with respect to pre-closing rents and other purchaseagreement terms. Now, seller wants buyer to modify those agreements. The modifications appear todisfavor buyer. Must buyer agree to modify the terms?

Click here for the ANSWER! Hotline Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the Week. Pleasesubmit questions to [email protected] or call (800) 562-6027. Please have your NRDS numberready when you call or e-mail the Hotline with your question. The Legal Hotline lawyer does notrepresent Washington Association of REALTORS® members or their clients and customers. Research thistopic and thousands of others online.

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