Profile picture for oquinn27

What costs is the buyer/seller responsible for if the deal on a home falls apart?

We agreed to enter a contract with the seller as long as their house appraised fairly.  When we received the appraisal, we learned that the seller was above the appraisal price and the square footage of the house was less than reported by the seller.  They refuse to negotiate.  Based on the info. we have, buying this home may be a poor decision.  If we back out now, what are we responsible for.
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September 04 2010 - US
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Answers (7)

Profile picture for wetdawgs
@Gloria:  You need to consult with an attorney.  I suspect if the lady chose to move in before the details of the written contract were finalized, she took the risk financially.  Let us know what the attorney says.
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March 11 2012
Profile picture for user011074
I OWNED 2 ACRES AND A HOUSE.  I USED TO LIVE IN MOBILE HOME DOWN BELOW.  AT THE TIME, MY LATE SIS LIVED IN THIS HOUSE.  A LADY BOUGHT MY TRAILER...I HAD IT SURVERY SO LADY WILL HAVE A LITTLE PIECE OF LAND/DEED.  WELL, SHE WONT BUY IT CZ IT IS NOT A STRAIGHT LINE.  SURVERY CANT MADE IT STRAIGHT NO MATTER WHAT.  IT IS SITTING LIKE A TRIANGLE SHAPE.  NO WAY SHE WILL GET MORE LAND THAN I AM.  NO IT WAS NOT A CONTRACT.  JUST VERBEL.  TOLD HER IF DONT LIKE IT, I WILL PAY HER BACK FOR TRAILER/GET OUT.  SHE TOLD ME PLUS MOVING EXPENSE.  TOLD HER NO NO   AM I RESPONBILE FOR HER MOVING EXPENSE??
I ALREADY SPEND $$ TO HAVE IT SURVEY.
THANK YOU
GLORIA BILLS
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March 11 2012
I am confused: you "agreed to enter a contract..." did you enter a contract or not? In other words, did you write up an offer, that was accepted by the seller, or did you just talk about buying the home?

If you have a contract, examine in carefully, as it will likely spell out what contingencies the contract has. If the contract says 'contingent upon an appraisal for the sales price', or some other verbiage similar to that, well you have an unfulfilled contingency. Likely, you have a time frame within which you can cancel. In other words, when the appraisal came back low, you will have a limited time within which to cancel the purchase, if you let a lot of time go by, then that contingency, depending on your contract and state's laws, would eventually not be useful to you.

If you have spent money on appraisals, inspections, etc, well you aren't likely to get those back.

So, to reiterate, read every line of your contract, and if questions still exist, seek competent legal counsel.
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September 05 2010
It really depends on how the contract was written.  Are you financing this home?  If the appraisal was lower than the asking price / offer then you should be able to walk away without losing your Binder deposit.  The bank is not going to approve the loan if the appraisal does not justify the sales price.
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September 05 2010
This is a contract law question and the agents should know better than to answer this. Without seeing your contract, and knowing your jurisdiction, no one can answer this one accurately for you.

Please read your contract thoroughly. It should stipulate which costs you are responsible for in this event, then review the agreements you have with other providers (such as your lender, the title company, etc) and see what you are responsible for there as well. If it is confusing, call each party separately and ask. If you still cannot determine an answer or disagree with what someone tells you over the phone, then see an attorney or contact a legal aid line in your area.
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September 05 2010
The Appraisal - If you had an appraisal rider on your sales contract, then you should be able to get a release from the sale and get your earnest money back.  If you are working with a buyer's agent, they should be able to do this for you.

The additional expenses - The square footage being less than reported may allow you to get a lawyer to get some more money back.  However, there are many factors in this... where you buying the home from a for sale by owner or a home listed by an agent?  Where there any notes on the MLS sheet that the sq footage may not be accurate? etc...
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September 05 2010
As a buyer, you would be out the expenses already laid out whether that is for inspections, bank fees for appraisal, credit report and application fees.  Since the appraisal was a contingency for the purchase, you should be able to get your earnest money back.  Good luck!
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September 04 2010
 
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