if an appraisal comes in low, and the seller agrees to it, does the buyer HAVE TO agree to it, or can he just walk?

Asked by homeforsale1, Springfield, IL Thu Mar 21, 2013

Appraisal came in $30,000 less than what they contract was. The seller decided to lower the price since I was unable to obtain financing. However, in the meantime, I searched my options and decided not to move forward with the sale and not sign the change order to lower the price. Now the seller decides to sue. Am I liable?

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8
Bob Brandt, Agent, Schaumburg, IL
Sat Jun 22, 2013
We do not know what your contract says.
Check with your Lawyer. Not many lawyers answer questions here.
Perhaps you will be unable to get your mortgage for another reason.
0 votes
Fred Herman, Agent, Staten Island, NY
Fri Jun 21, 2013
So you really liked the home. you made an offer that was accepted. you signed a contract to purchase the home. now you're able to buy the home for $30k less, but in the few weeks that past, you no longer like the home. ???

You stated that you searched your options. Hopefully, that search for options also included the consequences of those actions as explained by your lawyer.

You ask, "Am I liable." A great question for which you should have known the answer to before deciding "...not to move forward..."

Call your lawyer.
0 votes
William and…, Agent, Anna, TX
Fri Jun 21, 2013
It will be determined by the language in your contract. Ours in the Egyptian Board of Realtors says that if the appraisal doesn't meet the selling price, the buyer can be released and receive their earnest money.
0 votes
Sally English, Agent, Atlanta, GA
Fri Mar 22, 2013
Depends on how your contract to purchase the home was written. I always include a clause (for the buyer) that gives the buyer the option to terminate if appraisal comes in below purchase price. The reality is that I use this as a negtiation tool to lower the purchase price to equal the appraisal price.

If I am representing the seller - I avoid appraisal contingency clauses whenever possible!
Web Reference:  http://englishteam.com
0 votes
Edith Karoli…, Agent, Winnetka, IL
Fri Mar 22, 2013
I am sure since you are buying in Illinois, you are working also with an experienced real estate attorney, now this is a legal matter, your attorney should look into and then decide based on the terms in the sales contract and the situation itself, what your options are...

In my general understanding, one side can NOT just make a change to the agreed upon sales price,
any change like that needs to be in writing and agreed to by both sides... I understand the frustration of
the seller, who is trying to keep the sale alive and is taking 30,000 less based on the appraisal alone...
Nevertheless this is a legal matter and before signing anything contact and discuss the matter with your attorney for legal advice, and make sure your attorney has all documents at hand...

Good Luck to you

Sincerely yours,
Edith YourRealtor4Life & Chicago, North Shore & Northern Illinois Expert
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0 votes
Suzanne Hami…, Agent, Orland Park, IL
Thu Mar 21, 2013
This is a legal question and you should consult with an attorney regarding your options.

It all depends on the writing in the contract. Changing the sale price changes the contract, even if it is in your favor, so it is usually bilateral, requiring all parties to agree.

Again, consult with your attorney. This is a matter and interpretation of law which no Realtors are licensed to give advice on.

The seller may also just settle for the earnest money. There could be commission issues in this too though, so you could be liable.
0 votes
Phyllis McAr…, Agent, San mateo, CA
Thu Mar 21, 2013
Most pruchase contracts have an appraisal contingincy (safety net) and you can walk away if it comes in low. Your broker should be on top of this, and be able to take care of this
0 votes
Deborah Orr, Agent, Rosemary Beach, FL
Thu Mar 21, 2013
It all depends on the written language of the contract that you wrote or used. Did it even have an appraisal contingency? Locate the language in your contract dealing with the appraised value. Unfortunately, if it isn't addressed at all, then the could likely win a specific performance suit which would not only require you to buy the home but also pay the seller's legal fees if they win. There may be another contingency in the contract but again, every contract is different. Also your state laws could give you some relief. Better get a consult and let lawyer look at it because you could wind up paying the value plus sellers costs.
0 votes
It had a mortgage contingency. They were notified I was unable to obtain financing for more than the appraised value, however, I did not agree in the end to the change.
Flag Thu Mar 21, 2013
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