You need to talk to a real estate attorney, not just a relative who happens to be a lawyer.
I am sure that you have resolved this by now, once you got a lawyer involved. Basically you screwed up by signing the agreement that had the appraisal contingency removed. Even though your agent didnt tell you it is still on you to check what you sign. Sounds like your agent was anxious to get signed papers.
Anyhow if you can afford the extra downpayment to get your approved loan amount than you cant blow up a deal this way. If you had any contingencies based on findings at the inspection at the time of the appraisal it is still pretty easy to get out of a deal this way.
When you originally submitted your offer, you should have provided a preapproval letter. This preapproval letter will have stated that you are approved for a mortgage in the amount of $X (hopefully consistent with what you offered on the subject property and no more). The preapproval amount takes into account your downpayment....the amount does not matter.
I'm not an attorney, and I do recommend that you speak to one, but this preapproval letter should say it all. Unless your preapproval letter represents a downpayment that is LARGER than that on your accepted offer, it is not up to your lender to determine whether you CAN put more down.
Unless I'm missing something, you are entitled to a return of your deposit.
Good luck and please let us know how you make out!
In my opinion, the financing contingency does not cover you here because you waived the appraisal contingency. You not having the funds to close the deal does not mean the you don't qualify for the loan.
My advice would be to get the higher powers involved. Good luck - email me and let me know how it turns out, I'll be curious... Aaron@AaronBrown.com
You guys have the same misunderstanding that my agent had. The house did not appraise and despite this the financing was not denied by my mortgage broker. Rather he offered me two options one was to put down a larger downpayment the other was to finance with the same amount down with a larger loan to value ratio and PMI.
I asked him specifically to just deny me the loan, in order to put this problem to bed. He said he could not deny me the loan, based on their evaluation of my financial situation I still qualified. The broker and my lawyer both warned against this as I would really invite legal trouble.
You do not need an appraisal contingency if you have a financing contingency. If the house doesn't appraise out, you don't get your financing. It's a simple as that.
You are absolutely entitled for a return of your escrow deposit provided you notified the seller before the dates outlined in your Purchase and Sale Agreement.
Please let me know if you have further questions. I live in Northborough myself!
This is a case of sour grapes on the part of the seller and stupidity on my part for working with an incompetent realtor. I have an attorney in the family, who just sent over a letter with all the nec. legalize..
It is not necessary to have an appraisal contingency if you have a financing contingency. If the house doesn't appraise, you don't get financing. It's as simple as that. You are absolutely entitled to a return of your escrow deposit, provided you notify the seller in writing within the dates in your Purchase and Sale Agreement.
Please feel free to contact me directly if you have further questions. I live in Northborough myself!
RE/MAX Signature Properties
Are you financing? If so - the answer is simple with the seller because neither you or anyone else will be able to obtain the financing at the higher price.
Was your agent present at the time the appraiser went through the house? It's possible to argue the appraisal too. However - if the appraisal is correct - then you would be overpaying for the house. If you have a copy of the appraisal I would be happy to take a look at it for you.
The appraisal contingency should have stayed in the agreement.
If you did sign it, you cannot blame your Agent, the Bank or the Appraiser. You have a Contract!
Understanding that I am not an Attorney, and I cannot see the Docunents; you probably should see a Real Estate Attorney, (I understand that involving an Attorney is de rigor in Mass.).
Good luck and may God bless
Are you getting a mortgage for this property? If so, was there a financing contingency in the contract? If so, you can walk away and get your earnest money back because you would likely be unable to get financing for a property that didn't appraise.