Why Do I Have To Sign The VA's Mandatory Escape Clause?

Abstract

The VA's mandatory escape clause allows a home buyer to walk away from the deal if the home’s appraised value is less than the contract price. If the buyer walks away for this reason, they will get their earnest money deposit back. The escape clause even protects the home buyer from any fees or penalties. The only 'mandatory' part of the clause is that home buyers must sign it. There could be plenty of reasons why a home owner may choose not to back out of the deal. For example, a VA appraisal could mean just a few thousand. If that’�s doable, that  might be the right move. If a VA appraise that comes in barely lower than the asking price could mean only a few thousands. If you’ If the home appraises for less, the VA will only back a loan for up to the appraised amount.