"May" and "Shall" in the purchase contract

The purchase contract indicates the purchaser “MAY” purchase a pest inspection and “SHALL” purchase a property inspection & we have this contract before issuing the LE.

If the contract indicates the purchaser may purchase a pest inspection (but is not required to), do we disclose the pest inspection cost on the LE? I know that we must disclose the cost of the property inspection on the LE since it's required as part of the contract.

Thanks.

Include the pest inspection in section H on page 2 and indicate that it's optional. If you don't include it and pest inspections are normally obtained by purchasers in your area, and your borrower does so, you'll have a good faith tolerance problem at closing.

I don't know why this is any different than what was asked above but contracts in our area state the buyer (at their option) has XX number of days to get inspections like radon, mold, home inspection, survey, etc. I would say 90+% of the time these inspections are not obtained. Since it is their option and not a requirement of the loan I'm assuming we have to list each of these services in Block H as optional along with an estimate of the charge for that service. Am I correct? There are sooooooo many things with these new changes that make absolutely no sense.

bump

Since they aren't normally obtained, wouldn't you be okay not listing on the LE?

The fact that the purchase contract mentions those services as options doesn't mean you have to include them in the Loan Estimate. You include them in the Loan Estimate only if the applicant has said the service will be (or has been) used, or the service is customarily used by purchasers in the area in which the property is located. Of course, since the services aren't required by the lender, they will be in Section H.

If the purchase contract indicates that the buyer WILL obtain a service at the buyer's expense, you'll add it to Section H, of course.

That makes me feel a whole lot better about this, John & RolTyde! I was worried we would have to list all of these "may" and track down the estimates for the different areas we lend in. By adjusting to only those that are customarily obtained or we know the borrower will obtain that makes it so much easier!

Not only that -- It actually seems somewhat sensible!