What’s the difference between the Buyer Approval and Property Approval paragraphs?

What’s the difference between the Buyer Approval and Property Approval paragraphs in the Third Party Financing Addendum (TAR 1901)?

If a lender denies the buyer’s loan because of his credit history, income, or assets, this falls under Paragraph B(1), Buyer Approval, and your client must terminate within the time required by the blank in that paragraph. However, if a lender will not finance the loan because of something related to the property itself, such as a low appraisal, insurability, or lender-required repairs, this falls under Paragraph B(2), Property Approval. The time period for terminating under this paragraph is any time
before closing.

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4 Responses to What’s the difference between the Buyer Approval and Property Approval paragraphs?

  1. Lane Mabray says:

    Yes!! but the property must appraise and be in good condition….This is especially true with the buyer being able to procure homeowners insurance…Had this happen twice last yr. due to older roofs..Sellers finally had to take off market and install a new roof…

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  2. Does the lender have to provide something in writing in order for the earnest money to be returned to the buyer? I have never had this situation before.

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  3. Gerald Waldon says:

    I believe it may not be required, but I require a buyer’s rep to furnish the lender rejection of the loan to assure my seller’s the release of earnest money is a legitimate request per the contract. This definition of buyer and property approval is a good measure to keep in mind.

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