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Contract Advice Please!
I'll introduce myself quickly. I used to be on here a lot a long time ago, before baby, and now I can't even figure out my password, so I started a new account.
Anyway...
Here's the facts
Listed our home in April for $195K with a contingency that purchaser would allow us to find HOC.
Home sold for full price 3 weeks later.
Found home we loved, at VERY top of price range. Made an offer, and ended up getting accepted at full price with closing costs paid by seller.
Jumped through all of our hoops to get the home inspected and appraised, get lending worked out.
Found out Saturday morning that our current home appraised for 15K less than is being paid by our buyer. Buyer's loan says he can only pay appraisal amount.
This makes it impossible for us to purchase the home we have a contract on, as we would have 15K less to spend on it, and wouldn't even have 20% down at that point.
Our real estate agent, we feel, is bullying us into selling for the appraised price, and buying the home that is now over budget because the sellers are now threatening law suit.
We have signed nothing saying that we are selling for 180K. As of right now, his contract still says 195K, but he does not have financing for that amount.
We are stressed to the max. Our close date is Friday. I have to have everything out. My buyer is offering for us to "rent" from him after we close, for a month and a half until we find housing. However, we don't want to close with him for $180K because then we don't have the financial means to purchase the next house.
We can't afford the home we have a contract on, and the sellers are now saying they will sue us if we don't complete our purchase. Our lender says we're still "good for the money" but because of PMI, we would be so financially strapped that we might both have to take second jobs, which would not be possible.
Advice? I'm really angry and feeling untrusting of my agent, whom I think isn't working hard enough on my behalf.
- Heather
Re: Contract Advice Please!
They can not sue you for it so just terminate the contract and also find another agent
Might it be worth meeting with a real estate attorney and having them review the contracts and situation? I mean since you don't have an adjusted contract saying you are selling for the adjusted price I don't think you can be forced to just go ahead and sell for 15K less just because their loan won't let them pay more then appraisal, right? And as long as you have a contingency in your purchasing contract about the sale of your current home you should be able to walk away free and clear because of these complications, I would think.
But my agent says they can and want to sue us for the amount they spent on repairs that we requested. ( I understand this, and it should be around $1500, which we are willing to pay if we have to.) They also will sue us for the amount they've spent on a year-long lease on a town home while they build their dream home.
My agent needs to communicate the following to them:
- They have $1500 earnest money, which is there for their protection.
- Additionally, we paid $750 for a thorough home inspection which is good for 60 days. They could use this for another buyer, and that buyer would not have to pay for it. The repairs they did would have been requested by another buyer anyway.
Instead, I got a phone call suggesting we "do it anyway" and see if we can come up with an additional $15K. We don't have it. I don't know why our buyers agent isn't understanding our situation. We are both teachers and don't have time to take a second job. Just because we qualify for a $1650 a month mortgage payment doesn't mean we can do that. Our previous payment was going to be $1450 and that was our maximum, with cut backs to other parts of our budget to make it work. There is no more wiggle room, other than skipping the whole "eating" thing.
The sellers won't let us terminate. We've done what we need to, on our end, to do so, but they won't sign anything.
The sellers have to allow you to terminate do to funding not being approved. There is no way they are legally able to sue you for this. Get yourself a real estate lawyer.
You may also want to get your house appraised, that way you know what it's real value is. Hopefully for your sake, the appraisal will come back higher than your buyer's did, and you can go back to them with the new amount of money.
DIY & Home Decor Blog
That does not matter, you can default since you can not afford the new house and they can not sue you either
Get a real estate lawyer like Music said
Thank you for your advice. We have a recommended attorney on stand-by, but are still waiting to hear from the sellers.
We would be willing to still sell our home for $180K to the current buyer, if we had time to search for a more affordable option. However, until the seller lets us out of our contract, our hands are tied and we may be forced to terminate our contract with our buyer.
This is all just very frustrating, heart-wrenching, and stressful. I've never encountered anything that has caused this much heartache. I feel so soured to the whole experience that I want to just stay in my current home and forget about the sale.
Thanks for letting me vent.
Is your earnest money being held at a title company ? If they want your earnest money, then they will have terminate the contract or else the title company won't release the earnest money to them.
Is the purchase of the second house contingent on the sale of your first? If this is true then you should be able to cancel the purchase if the sale does not go through with no penalty.
Also, if I were the buyer of your current home, I would be renegotiating the purchase price with you since the appraisal came back lower than the purchase price. Most contracts have a provision in it about the appraisal. I know that I would not want to spend an extra $15K if I don't have to.
We have a home sale contingency. But, we can't sell for $180K. This means we should be able to get out of the contract.
The agent is saying no. She says that we might as well go ahead with the sale since we can't get more than $180K anyway.
We're fine with selling for $180, knowing that we have to find a different house then.
However, if they won't let us out of the contract, that's the problem. The REA is saying they can sue us so we need to go ahead and buy. I see this as bullying.
The lender won't allow my buyer to pay more than the appraisal, because that's a contingency for him. Therefore, it looks like we have no choice but to release that contract. We have an apt with our lawyer on Thursday morning.