Home Buying in San Jose>Question Details

Hollie, Home Buyer in Tracy, CA

living area

Asked by Hollie, Tracy, CA Tue Dec 14, 2010

The public record is 1700sf, but the listing agent listed as 1800sf.

Now the appraisal report showed 1700sf. Can we ask the seller to reduce the price? If they don't want to do it and cancel the contract, can we get our deposit back? We removed all contingencies except the appraisal contingency.

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Answers

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Hollie you need to assess if the 100 square feet is really a deal brieaker, how much do you love or not love the house. As a buyer you should have looked at the tax card before even putting in an offer, it would have been seen there and you could have questioned it. This is why a dual agent does not work. The problem with seeking damages is proving you were harmed, and teh agent knew he typed in teh worng amount and did it on purpose. My suggestion is assess how much you want the house. 100 sf is not a deal breaker, if it was 1000 then yes.... good luck with working things out
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Tue Dec 21, 2010
Legal advice is best gotten from Real Estate Attorneys. Find a good one. No one here should be advising you as to what action to take or what rights you have in the contract.

The difference between 1700 and 1800 square feet is important but may not be significant. Did you like the house? Does your furniture fit? Is is in the right location for you? How about schools, commute distance, neighborhood, etc.?

In commercial property, every square foot counts. In residential it may be a different matter.

Depending on what contract you used, you may have already waived your appraisal contingency when you removed your financing contingency. Another answer to get out of an attorney.

How much was the house? If it was in Tracy and cost $200K, you might hypothetically calculate that you lost $11K. That would be based on absolute square footage being used as a basis for value. If it appraised at the sales price with 1700sf, you have an argument on the seller's side that it is worth what you paid for it.

Again, time for a good real estate attorney or buy the house.

And your agent ought to know how to guide you on these issues. Based on your previous comments, it doesn't sound like you are getting good advice. It also sounds like the listing agent is a dual agent. Red flags or a tempest in a teapot? You always (for the past 2 years on several different transactions) seem to have lots of basic questions that tell me you've gotten no help from the agents you've worked with.

Mark Burns, Realtor
Coldwell Banker Elite - Top 1% Worldwide
President - PRDS, Contracts and forms for Silicon Valley Residential Real Estate 2008-2011
DRE #00896552 Licensed isnce 1985
Over 600 Homes Sold in Silicon Valley
Web Reference: http://www.markburns.com
1 vote Thank Flag Link Tue Dec 14, 2010
Hollie - generally the appraisal contingency refers to the pricing. If the price of the house doesn't come in at or above the cotnract price, then you are not obligated by the contract to by it. If you want out of the contract because you truely do not want to buy the house, that is another situtation. How many times have you been in the house, do you love it, or are you looking for the deal. There seems to be more here than meets the eye from your question. I hope you have representation with a buyer agent, they should be able to advic\se you. Are you a first time home buyer with cold feet? Good luck, it sounds like if you have hung in there past the building inspections you really love the house.
0 votes Thank Flag Link Sun Dec 26, 2010
Exactly, Scott.

Hollie, I think you really need to be able to demonstrate how the difference in measurement affects you, how you had been deterred from checking the public records, and how you wouldn't have bought the property if it was, in fact, smaller than the listing agent represented.

If you can do that, have at it.
0 votes Thank Flag Link Tue Dec 21, 2010
#1. The MLS page should have had a Caveat Note simular to: "Information believed to be accurate but not guaranteed. Buyers should independently verify all information prior to submitting any offer to purchase".

#2. Did the House appraise for the sales price or not? -if it did, then isn't all well???

#3. If 100 sq. ft. is really worth walking over. You can walk away from your earnest money and hope the Sellers do not bring Legal action against you.

Whether you have Buyers remorse or a real leg to stand on, is first and foremost a Legal question that needs to be addressed by Real Estate Attorney...

Good Luck!
0 votes Thank Flag Link Tue Dec 21, 2010
I would say that 100sf is not a deal breaker. If you like the place at 1700sf what difference is 100sf. The information in the mls data should be as accurate as possible but it is not always 100%. I see this all the time. The room sizes are off, the room numbers are off. Do you really want this place or are you looking for a way out? I would say to discuss it with your agent and come to an agreement if you can see yourself living in this place move in and enjoy.
0 votes Thank Flag Link Tue Dec 21, 2010
It sounds as though you have an argument.
I dont think anyone can give you the legal advice you are asking except a real estate attorney.
You can try to get it worked out on your own in the meantime.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@socalhomesrealestate.com
http://www.socalhomesrealestate.com
California Department of Real Estate License # 01312992
0 votes Thank Flag Link Sat Dec 18, 2010
Your buyers agent who is representing you be expert answer all your questions.

If the home you are purchasing is still within the appraised value then price per sq. ft. then it would not matter

Cancel a contract w/o any professional reviewing executed agreement no "virtual answer" to your benefit can be rendered.

Contact your buyers agent or real estate attorney

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Sat Dec 18, 2010
Hi Hollie:

Regret to hear you have a problem of such a magnitude at the last minute.
I am also surprised you used a Dual Agent.

Sometimes Listing agent and Sellers use square footage from the outside wall
and some from the inside wall.

If your appraiser, "measured and appraised" the property then it is move forward
or a walk decision for you. Looks like you used the C.A.R. contract, as there is a
Financing and Appraisal contingency, separately.

On a separate note, I disagree with Carl Medford, this is a case of Dual Agency, with all
Contingencies removed except Appraisal, and buyer is asked to switch Agent now.

Best that you get in touch with a Real Estate Attorney, if you cannot resolve.

It will be great for us to know how did you resolve it.

Happy Holidays.
Perry
Web Reference: http://www.ruthandperry.com
0 votes Thank Flag Link Sat Dec 18, 2010
You can ask the listing agent to reduce the price; the case is closed if the seller agrees with you. But what if the seller does not agree with your reduced price? Please keep in mind that this dual agent has to be loyal to the seller too. I always advise buyers out there to work with buyers agents; in case things do not go smoothly, you have someone to rely on. Of course lawyers can help too!
0 votes Thank Flag Link Fri Dec 17, 2010
He is the broker. It's $300 per squar footage in that area. For the100sf discrepancies, how much we should ask them to credit to us? $15k or $10k?
0 votes Thank Flag Link Fri Dec 17, 2010
Hollie:

Then ask him for someone else in his office to represent you. Go to his broker, if necessary.
0 votes Thank Flag Link Fri Dec 17, 2010
He is a dual agent. He only help the seller and try to close the transaction.
0 votes Thank Flag Link Fri Dec 17, 2010
Hollie:

After all the questions I've seen you post here, I just have to ask, "What is your Realtor doing for you?" All of these questions can be answered by a competent Realtor who should be working on your behalf. There are certainly plenty of good answers below – I guess I’m concerned about the level of representation you are receiving since you seem to have so many unanswered questions you are bringing to this forum.
.
0 votes Thank Flag Link Fri Dec 17, 2010
You can still back out, but I'm not your agent or broker and this is getting too technical for broad advice in an open forum. If your agent is good, he or she will be able to help you. Otherwise, get a real estate attorney.
0 votes Thank Flag Link Tue Dec 14, 2010
Thanks Terri.

The listing agent said the appraisal contingency is only for the value not for the square footage. Based on his opinion, it seems that we have no chance to back out since the value has came to the price.
0 votes Thank Flag Link Tue Dec 14, 2010
Thumbs up to Mark Burns who gave you an excellent answer. I am not going to give you advice on this situation. I will give you some general information.

When an agent inputs into the MLS they obtain information from the seller and/or county records, or other third parties. If the seller had a previous appraisal showing 1800 sq. ft. it's possible they used that number. The MLS has a box to check as to where the information was obtain in regards to the square footage.

A buyer determines the value they want to pay for a house. The appraisal is used to determine value for the protection of the lender and also for benefit of the buyer. So when a home comes in at the sale price we are left to understand the sale price is the value of the home. This value is based on the current square footage, as compared to 3 or more similar properties.

With that, in reading your question it appears to me that perhaps you are looking for a way out of this transaction and if that is the case you need legal advice. It is also possible you are looking to save a bit more on what you already agreed to, and that is where your agent comes in.
Web Reference: http://terrivellios.com
0 votes Thank Flag Link Tue Dec 14, 2010
Michael, thank you for giving me the clear answer. Yes, we haven't remove the appraisal contingency which is a separate form(Extension of Time Addendum).

Two things really confused me:
Why listing agent can put any number on MLS without any verification?
How to get correct number about a house if we can't trust public record and appraisal?
0 votes Thank Flag Link Tue Dec 14, 2010
The responsibility to check the reports is actually yours. The agent is just an intermiediary in the transaction. But, an argument could be made that the incorrect data was displayed on the MLS...long shot though.

Going back to your original question, you CAN negotiate or back out and get your deposit back if you have not yet removed your contingency.
0 votes Thank Flag Link Tue Dec 14, 2010
Hollie,
Did the listing agent represent you and the seller? Your situation is much easier if you are working with a buyers agent. This does not mean the listing agent can not help you.
Regards,

Kevin Vo
San Jose Realtor
(408) 228-2161
kevinvohomes@yahoo.com
0 votes Thank Flag Link Tue Dec 14, 2010
You can ask the seller to reduce the price and they can always say no and you can still buy the house. I would try to be reasonable and explain that the offer was made based on the assumption that it was 1800 sq feet. Since it's 1700 sq feet that changes the comps a bit and ask for the reduction. The worst that will happen is that they will say no.

With a difference of 100 sq feet for the entire house, the sellers probably won't cancel the contract. I could understand if a zero had been added to the square footage or acreage. But this is likely less than 1' off in a few rooms of the house. And you apparently have no ability to cancel the contract since you've waived everything. And apparently despite the 100 square feet, your house passed the appraisal.

Also, there usually isn't that much difference in price between a house of 1800sq ft and 1700 sq ft. Assume standard features and have your realtor pull comps at 1800 sq ft and 1700 sq ft. I don't think you'll find much difference.

And if you get an attorney that's worth a darn, he's going to give you a good talking to about waiving contingencies and rights of inspection and such. Which he should. I see a lot of folks playing fast and loose with this when they shouldn't be. I'm getting ready to pay cash for a house and I STILL have contingencies written in so that if something catastrophic happens and I can't get the money, I can get out of the contract without being sued. When you go talk to the lawyer, be sure to ask him about something called "specific performance" .
0 votes Thank Flag Link Tue Dec 14, 2010
Hi Hollie and thanks for your post.

I'm in total agreement with my pal, Mark, on this one. Throughout this transaction with the listing agent serving as your buyer's agent, you've had questions, and while we've all been able to help you generally with information, what you are now seeking is legal advice that can potentially put your deposit at risk and I'm afraid that the only source for that type of information is an attorney. Without knowing the specifics of your transaction or the contract, citing that you can cancel the contract without consequences may not be true.

Talk to a real estate attorney for assistance, and, again, Hollie, if you choose to cancel the contract and find another home, please contact a real estate agent to represent YOU! This is especially important when you are a first time home buyer because the guidance your Realtor can give you through the negotiations and transaction can be invaluable. If you need the names or contact information for an attorney, do not hesitate to contact me.

Good luck!

Sincerely,
Grace Morioka
Area Pro Realty
Tel (408) 426-1616
0 votes Thank Flag Link Tue Dec 14, 2010
Hollie,

Public records are almost never right and you always have to verify for yourself what the measurements are. I would believe the appraisers estimate is accurate because they have measured the home. Did it appraise for the purchase price? Do you like the home? Do you see yourself living there? If you answer yes to these questions then I would ask, Does it really matter? If you saw this home and it said 1700 FSF, would you have passed on it and not looked at it?

You have a point and it is unfortunate that the information was incorrect. I would ask you this, Do you want to be right or do you want to be happy? My guess is that the listing agent did not measure the home or made an honest mistake when they did. It can happen to anyone.

Good luck with whatever you decide.
Tom
0 votes Thank Flag Link Tue Dec 14, 2010
Not necessarily. But at this point, we're getting into details that a discussion board cannot and probably should not answer. Is there a reason you're not discussing this with your agent?
0 votes Thank Flag Link Tue Dec 14, 2010
Sure, we wouldn't remove the contingency.
If the contingency period expires today, we have to cancel today, right?
0 votes Thank Flag Link Tue Dec 14, 2010
On time means you cancel the contract before the contingency period expires. Do not remove appraisal contingency if you decide to cancel the contract.
0 votes Thank Flag Link Tue Dec 14, 2010
If you want to cancel the contract, then do not remove contingencies.
0 votes Thank Flag Link Tue Dec 14, 2010
Hello Hollie,
You can ask the seller to reduce the price based on the appraisal. If the seller does not agree with you, you may cancel the contract. You will get your deposit back because you have never removed the appraisal contingency. If you do not cancel the contract on time, you may lose a portion or all of your deposit.

Good luck,

Kevin Vo
San Jose Realtor
408-228-2161
kevinvohomes@yahoo.com
0 votes Thank Flag Link Tue Dec 14, 2010
Hi Hollie,

The appraisal contingency is normally used for price issues, but I can see it being used for square footage verification too. Since the contingency is still in place, as the agent, I would definitely renegotiate. If the seller refuses, and you want to back-out, then I would cancel the contract and get your deposit back.
0 votes Thank Flag Link Tue Dec 14, 2010
Hollie, almost every listing includes a note that says "buyer to verify" everything from the number of bedrooms to the square footage of the house and lot. Unless you can prove fraud, for which I'd advise you to engage an attorney, you have the inspection period to verify everything. If that period has passed, you can try to re-negotiate with the seller, but they are under no obligation to change the price. You can potentially use the appraisal contingency to cancel and get your deposit back, but you will need to check your contract to see if that contingency is automatically removed after a specific date or if it is in place until you sign a removal form.
Good luck!
John
0 votes Thank Flag Link Tue Dec 14, 2010
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