Break contract due to FHA-VA Addendum

[gdr]

I recently signed a contract to purchase a house for $112,500 in South Carolina. I am financing through the VA. The VA appraised the house at $109,000. He also found the roof was bowed on both ends. My contact contains a FHA-VA Addendum which states: "It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not be obligated to complete the purchase of the property described herein or to incur any penalty by forfeiture of earnest money deposits or other wise unless the purchaser has been given, in accordance with HUD/FHA or VA requirements, a written statement by the Federal Housing Commissioner, Veterans Administration, or a Direct Endorsement lender setting forth the appraised value of the property of not less than sales price. The purchaser shall have the privilege and option of proceeding with consumation of the contract without reqard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and Urban Development will insure or the amount the VA will guarantee. Neither HUD nor the VA warrants the value or the condition of the property. The purchaser should satisfy himself/herself that the price and condition of the property are acceptable." Does this valuation statement allow me to break the contract with no worry of being sued?

[This message has been edited by gdr (edited July 09, 2000).]

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by gdr:
I recently signed a contract to purchase a house for $112,500 in South Carolina. I am financing through the VA. The VA appraised the house at $109,000. He also found the roof was bowed on both ends. My contact contains a FHA-VA Addendum which states: "It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not be obligated to complete the purchase of the property described herein or to incur any penalty by forfeiture of earnest money deposits or other wise unless the purchaser has been given, in accordance with HUD/FHA or VA requirements, a written statement by the Federal Housing Commissioner, Veterans Administration, or a Direct Endorsement lender setting forth the appraised value of the property of not less than sales price. The purchaser shall have the privilege and option of proceeding with consumation of the contract without reqard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and Urban Development will insure or the amount the VA will guarantee. Neither HUD nor the VA warrants the value or the condition of the property. The purchaser should satisfy himself/herself that the price and condition of the property are acceptable." Does this valuation statement allow me to break the contract with no worry of being sued?

[This message has been edited by gdr (edited July 09, 2000).]<HR></BLOCKQUOTE>

You have a right to cancel the contract based on the condition of the property. You should have completed your own independent home inspection which is recommended by HUD. This inspection should be in addition to the inspection by the FHA/VA appraiser. ww.hud.gov