It's finally here - the newest FAR Residential Sale and Purchase Contract a/k/a FAR-9.
One major change is in paragraph 3 - FINANCING. Previously, in the FAR-8 the buyer needed to provide a commitment letter to the seller within the "commitment period". Should the buyer fail the seller could terminate the sale unilaterally. However, even after this period the buyer maintained their ability to exit the transaction and receive their escrowed funds upon the presentation of a mortgage denial letter. Once the buyer provided the commitment letter the transaction basically became a cash transaction whereas the financing condition was then waived. Due to the marketplace many sellers were reluctant to terminate the transaction for the simple failure to provide a timely commitment letter.
This has all now changed in the FAR-9.
"Buyer's failure to provide Seller with a written notice that the Buyer is unable to obtain a Commitment within the Commitment Period will result in the forfeiture of Buyer's deposit(s)."
Added also to the financing contingency was the ability of the buyer to obtain their deposit back even after providing a commitment letter if there were conditions contained in the commitment letter that related to the property itself and that were not met and thus the buyer was not able to close.
I suspect many Realtors will not be aware of these subtle differences until the milk has been spilled.
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