We receive many questions about the third-party financing addendum for FHA and VA loans in our current market. In particular, we get asked about how to handle the appraisal section when the home doesn’t need to appraise for the price that it’s being purchased. A lot of agents get confused about this because you don’t use the addendum for the right to terminate due to an appraisal when you have FHA and VA loans. Instead, you still use the third-party financing addendum.
Simply fill out the fourth paragraph in that addendum, which addresses the appraisal. You do a partial waiver by filling in a lower price. Buyers using FHA or VA are allowed to pay more than the appraised value. As an example, you have a $250,000 house, the buyer wants to offer $280,000, and they have the $30,000 difference to pay out of pocket. So you would just write in paragraph four that the appraisal amount is $250,000, not $280,000.
If we can ever answer any of your questions, give us a call or send an email. We would love to help you.