Have a ratified contract for the sale of our home and it is w/o an appraisal contingency. The appraisal came

Asked by Smbblack, Maryland Wed May 6, 2009

in at $11K under the sale price. Buyer is not happy and doesn't want to pay any more that the appraisal price. It's our understanding that we have a binding contract and the buyer must settle. What can we do at this point to force buyer to the table?

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., , Wescott Village, Wilson, NC
Wed Dec 9, 2009
As long as it is in Good Faith, but you cannot force anyone to do anything that is what courts do.

VJ Adriano
E-mail to: VJ@Mris.com
Cell: 301-357-5071

Sales & Leasing Associate MD, DC, VA
99 Commerce place
Largo, MD 20774
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voices member, , 21117
Wed May 6, 2009
It depends on the wording in the contract. If it's an FHA loan, then it MUST appraise because the buyer won't get the mortgage. Consult your agent or an attorney.
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Vicky Chrisn…, Agent, Purcellvile, VA
Wed May 6, 2009
Do you have an agent? That is who knows this contract and should be advising you. I don't know MD laws.

The previous poster must be referring to how their contract works. I, too, am in VA and will tell you that if you don't have an appraisal contingency, and the buyer tries to back out because of it, they would be likely considered in default, and an attorney could be brought in. You could potentially sue for damages - which might be the sales price. The original poster also is likely using a different contract, because in the DC metro area we all use the same Regional Contract - so the one I use may be the same one you are using. And, you very definitely chose if there is an appraisal contingency or not.

Of course, if they have a financing contingency and now can't get financing because of the appraisal... well, it's a problem; regardless of whether or not are in breach of the contract. Remember, even if you take action and win, none of this happens quickly, unfortunately.

Appraisals are a common issue today - in fact, I believe it is a sign of a changing market. We always have problems with appraisals at the bottom of the market. Buyers are valuing property higher than appraisers support. Overall, its a positive. In your case, and in individual cases, it's an issue - and a very big one.

But, before you get desperate and start calling attorneys, look at the appraisal - maybe the appraiser got it wrong. I have challenged appraisals and won simply by supplying another comp or more information; or by correcting factual mistakes about the subject property. If that fails, then suggest another appraisal, maybe offer to pay for it. They may have to switch lenders, and it could cause a closing delay. But, if it means another $11K in your pocket, it's worth it.

I am throwing thoughts and ideas at you rather than solutions, because, again, your agent needs to help you find the solution. It's just too difficult from over here on the other side of the river. If you don't have an agent, please talk to an attorney to consider your options.

But, remember, the most successful negotiations are those that keep in mind the common goal. They want to buy your house. You want to sell it to them. Success comes when you work to resolve the issue together.

Best of luck.
Web Reference:  http://www.vickychrisner.com
0 votes
Claudia McK…, Agent, Norfolk, VA
Wed May 6, 2009
All states are different, but you need to re-read your contract. In Virginia, our contract states that if appraisal comes in under the selling price, then the seller can pay, the buyer can pay, or it can be negotiated. Either side may also cancel with no defaulting penalties. Please talk to your realtor about this if you used one, if not, please double check your original contract. Either way, the lender will probably not loan more than the appraised amount.
Claudia McKenna, Realtor
Prudential Towne Realty
2161 Taylor Road
Chesapeake, Va. 23321
Office: 757-488-4600
Cell: 757-816-4625
Chesapeake, Va.
0 votes
Andres Garcia, Agent, Hoboken, NJ
Wed May 6, 2009
It's hard to say if you can force them to the table. That is a questions for your attorney. Typically you do not have an appraisal contingency. That really falls under the mortgage contingency. It can get pretty complicated. If the buyer is putting down what the contract requires them to and the bank will not give them a loan for the difference, because of the appraisal, the buyers may have an out. For example, if the contract price is $200,000 and the buyer is putting down $40,000, as per the contract, the mortgage contingency would be for $160,000. If the appraisal comes in at $189,000 and they are putting down $40,000 they will only get approved for a loan of $149,000. So the appraisal really becomes a mortgage contingency issue. If there is a mortgage contingency in the loan you could have an issue. Have a conversation with your Realtor and attorney to see where you stand.

I hope this helps.

Andres Garcia
Sales Associate, CDPE
RE/MAX Gold Coast Realty
56 Newark Street
Hoboken, NJ 07030
Direct: 201 795-5200 x340
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