Fannie Mae Agreement of Sale

The Fannie Mae Agreement of Sale: Understanding the Basics

Are you considering purchasing a property that is owned by Fannie Mae? If so, it is important to understand the Fannie Mae Agreement of Sale.

What is Fannie Mae?

Fannie Mae, short for the Federal National Mortgage Association, is a government-sponsored enterprise that was created in 1938 to provide liquidity to the mortgage market. Fannie Mae buys mortgages from lenders and packages them up into securities that are sold to investors.

What is the Fannie Mae Agreement of Sale?

The Fannie Mae Agreement of Sale is a standardized contract used by Fannie Mae to sell their foreclosed properties. The agreement outlines the terms and conditions of the sale, including the purchase price, closing date, and contingencies.

What are some important clauses in the Fannie Mae Agreement of Sale?

1. Property Sold As-Is

One of the key clauses in the Fannie Mae Agreement of Sale is that the property is sold „as-is”. This means that the buyer is purchasing the property in its current condition, and Fannie Mae will not make any repairs or improvements to the property. It is important for buyers to do their due diligence and inspect the property thoroughly before agreeing to purchase it.

2. Earnest Money Deposit

The Fannie Mae Agreement of Sale requires an earnest money deposit from the buyer, which is typically a percentage of the purchase price. This deposit is held in escrow and applied towards the purchase price at closing. If the buyer backs out of the sale for any reason that is not covered by a contingency, such as financing or inspection, they may forfeit the earnest money deposit.

3. Closing Date and Possession

The Fannie Mae Agreement of Sale specifies a closing date, which is the date on which the sale will be completed and the title transferred to the buyer. The agreement also includes a possession date, which is the date on which the buyer can take possession of the property. It is important for buyers to plan accordingly and make sure they can meet these dates.

4. Contingencies

The Fannie Mae Agreement of Sale includes contingencies, which are conditions that must be met before the sale can be completed. Common contingencies include financing, inspection, and appraisal. If these contingencies are not met, the buyer may be able to back out of the sale and receive a refund of their earnest money deposit.

In conclusion, the Fannie Mae Agreement of Sale is a standardized contract used by Fannie Mae to sell their foreclosed properties. It is important for buyers to understand the terms and conditions of the sale, including the property being sold „as-is”, the earnest money deposit, the closing date and possession, and the contingencies. By doing their due diligence and understanding the agreement, buyers can make informed decisions and avoid any potential issues.