More Revisions to paragraph 8(b):
The seventh change provides that if the buyer stays silent (does not notify the seller in writing) as to whether he was approved for a loan, the transaction will proceed as a cash transaction, unless the seller timely terminates the contract (within 3 days after expiration of loan approval period) by written notice. Under the previous version of the contract, the buyer's selection of financing did not automatically convert to a cash transaction when the buyer remained silent regarding loan approval. Now the silent buyer loses the benefits of the financing provisions.
The eighth change This clause was retooled. Before, if the buyers obtained a loan approval, they were entitled to a return of their deposit if there was no closing due to the appraisal being insufficient to meet terms of the loan approval under paragraph 8(b). This is no longer the case. Because the language that directed the deposit back to the buyer due to insufficient appraisal was deleted; now appraisal issues will be resolved at the time the buyer determines whether the loan approval is obtained. Along these lines, the buyer will not be able to claim that the appraisal is a property-related condition because the new language precludes this. Also note that the provision only benefits buyers who provide the seller timely written notice that 1) the loan approval was obtained; or 2) in the absence of obtaining the loan approval, the buyer is confident of his ability to obtain the loan approval and close on the property. Previously a buyer obtained the benefits of this subparagraph if he was approved for a loan or was deemed to have obtained Loan Approval.
One last note regarding this subparagraph. It is hoped that fewer contracts will fail to close at the end of a transaction due to property related conditions not being met under this new agreement. Why? Because sellers can discover if there are property-related conditions (by requesting this information in writing from the buyer), property-related conditions can be identified earlier then closing and, if they can't be resolved, the property can be returned to the market sooner.