I was in shock when I read this most recent addition to a contract with a bank addendum because it essentially gave the bank carte-blanche over the P&S.
Article 15. The Seller reserves the right to terminate the Contract for any reason in its sole discretion. Should the Seller terminate this contract, the Seller's sole liability to the Buyer will be to return the Buyer's deposit, at which time the Contract and all addendums thereto shall cease and terminate and Seller and Buyer shall have no further obligations, liabilities, or responsibilities to one another.
In the dozens of addendums I've had the opportunity to review, this is the first time I've seen this. It was easy for me to find this in the 5 page addendum the bank sent over, but it might not have been in the 22 page addendums I have seen in the past. This becomes another issue of disclosure to your buyer. If you have not fully disclosed this issue to your buyer, and the bank actually does back out, the buyer could have already paid for (and you are now responsible for): dewinterization of the property, a home inspection, a septic inspection, a water test, radon air/water test, lead paint test, pest inspection, site survey, and an appraisal-all of which could come up to a few thousand dollars. This is a huge risk for all parties involved on the buyers end, so with proper disclosure by the SELLING AGENT it will be up to the buyer to decide if they want to enter into a contract with this clause.
I have had the opportunity to review dozens of bank addendums, I know the "tricks" they hide in the contract. If you are a buyer, please, please, please make sure you are working with an agent who is familiar with both Short-sales and Foreclosures as they require a different skill set than an ordinary transaction.
Joshua Matthews-Keller Williams Coastal Realty-Portsmouth NH
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