"Escape Clause" -- Could it effect my current agreement numbers?

[Mark Beekman]

I'm in the process of selling a rehab to a husband & wife who are doing a 100% financed VA loan.

The house was under contract for $364k with a $5k Seller assist. Appraisal came back at $359k, so the new, negotiated & signed agreement is for $359k with a $5k Seller assist.

The mortgage processor just emailed me an "Escape Clause" to sign stating the following:

"It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise or be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs.

The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Verterans Affairs."

I realize what this means in terms of earnest money, but what does it mean in terms of our current contract numbers. Does the fact that the sale price is now the same as the appraisal price mean that we're good to go? Or, can the bank come back and say that, once closing costs are added, the number is higher than the appraisal and we'll have to renegotiate?

I've never run into this before, so I'm just looking for a little bit of clarification to ease my frazzled mind :)