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Old 12-09-2012, 04:20 AM
 
1 posts, read 8,769 times
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We made an offer on the house that price is higher than average house. Originally we weren't going to submit the contract since we knew the seller was asking too high. But the Listing agent kept telling my agent and us that "purchase price is subject to appraisal" (which meant that if appraisal is low, seller will reduce the purchase price). And the seller DID state this clause in the Agreement "purchase price is subject to appraisal".
But when we received very low appraisal (appraisal price is $60,000 lower than purchase price). the seller refused to reduce any price. We now have to cancel the contract. But we spent all the money for the home inspections and loan applications - appraisal cost. So we are wondering if we can get our money back (inspcetions and appraisal money...) because the reason we accepted the seller's offer was seller stated "purchase price is subject to appraisal" in the Agreement. But they didn't honor what they said.

Thanks for your input!
Mimi
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Old 12-09-2012, 05:34 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,773,863 times
Reputation: 3876
Quote:
Originally Posted by hectr026 View Post
..."purchase price is subject to appraisal" (which meant that if appraisal is low, seller will reduce the purchase price)....
That is a nebulous phrase which, in my opinion, does not mean that the seller will sell at a lower appraisal price. I would interpret it" the purchase price is contingent on the appraisal". When it's contingent on the appraisal, then if it doesn't appraise for the purchase price the buyer doesn't have to purchase the house and gets their earnest money back.

If the listing agent provided an email to your agent that stated the seller will sell at the lower appraised price, then you may be able to go after the listing agent, and his broker, since they misrepresented the language in the contract.

Also, your agent should have required that the language be more specific. Since he didn't, and you relied on his interpretation, and he apparently relied on the listing agents statement, then your agent's broker may be responsible to cover your expense, since it "appears" to be an error on the part of your agent.

This is not legal advice. I'm just giving options, and my opinion of the interpretation, and who may be in error. You can ask both of the brokers to reimburse you, and if they refuse, then you should contact an attorney.
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Old 12-09-2012, 06:24 AM
 
Location: Ocala, FL
6,470 posts, read 10,332,410 times
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Gotta agree with Captain Bill. This is the reason that realtor offices carry E&O (Errors and Omissions) insurance.
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Old 12-09-2012, 06:38 AM
 
Location: DFW
40,952 posts, read 49,155,879 times
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Quote:
Originally Posted by Captain Bill View Post
Also, your agent should have required that the language be more specific. Since he didn't, and you relied on his interpretation, and he apparently relied on the listing agents statement, then your agent's broker may be responsible to cover your expense, since it "appears" to be an error on the part of your agent.
I agree with Bill about the misunderstanding but disagree about the Broker reimbursing your cost and expense. Sounds like you did not 100% understand the agent and the agent may not have been 100% clear. If the home does not appraise, you can probably terminate the contract but not force the seller to come down on his price.

You need to discuss with your agent. Sounds like you both failed to communicate.

If the Appraisal is close in price many times the seller will lower the price to get the house sold but the seller is not forced to come down on price or reimburse you. Could you have possibly gotten a very low appraisal ?
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Old 12-09-2012, 06:49 AM
 
3,599 posts, read 6,781,054 times
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Seller honored the end of the contract.

Its and opened and shut case. No seller would every agree to "lower" price after contract is signed.

Contract was dependent on appraisal. Up to both parties to do which whatever they want to. If buyer doesn't agree with contracted price with lower appraisal than that's their out.

Think of it this way. In the hey days of 2001-2005/6. If u had contract for say $500k on home. And the appeal came back at 560k. With that exact same wording. Could the seller come back to u and demand $60k more or that you increase your offer more than the original price.

Lesson learned. Move on.

Same thing would apply to home inspection. Buyer has to pay $300-500 for home inspection. Seller isn't obligated to fix every little problem in home inspection. Both buyer and seller would have to agree on terms what to do after home inspection.

Rule of thumb unless its an all cash offer with zero contingencies. If you are a buyer and sign contract And seller agrees. Be prepared to spend $300-400 for appraisal and expect that money to be non refundable. The cost of buying a home.
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Old 12-09-2012, 07:15 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,773,863 times
Reputation: 3876
Quote:
Listing agent kept telling my agent and us that "purchase price is subject to appraisal" (which meant that if appraisal is low, seller will reduce the purchase price).
If the listing agent told the buyers agent that the purchase price is subject to appraisal means that the seller will reduce the purchase price if the appraisal is low, then the listing agent misled the buyers agent, and apparently the buyers agent took his word instead of getting the correct interpretation. If that is what happened then the agent(s) and brokers should be responsible for providing an incorrect interpretation of the clause.

However, if the listing agent simply said "purchase price is subject to appraisal" and the buyer interpreted it to mean the seller would lower the price to the appraised value, then I would feel that the agents would not be responsible.
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Old 12-09-2012, 08:11 AM
 
397 posts, read 613,588 times
Reputation: 210
Quote:
Originally Posted by hectr026 View Post
We made an offer on the house that price is higher than average house. Originally we weren't going to submit the contract since we knew the seller was asking too high. But the Listing agent kept telling my agent and us that "purchase price is subject to appraisal" (which meant that if appraisal is low, seller will reduce the purchase price). And the seller DID state this clause in the Agreement "purchase price is subject to appraisal".
But when we received very low appraisal (appraisal price is $60,000 lower than purchase price). the seller refused to reduce any price. We now have to cancel the contract. But we spent all the money for the home inspections and loan applications - appraisal cost. So we are wondering if we can get our money back (inspcetions and appraisal money...) because the reason we accepted the seller's offer was seller stated "purchase price is subject to appraisal" in the Agreement. But they didn't honor what they said.

Thanks for your input!
Mimi
The clause gives you an out of contract with return of ernest money.

It does not provide for reimbursement of appraisal fee and the seller does not have to lower their price.

This is why you should have an attorney review all contracts. It will be very difficult to get any money out of your agent other than negotiating a rebate on commission if the agent sells you another house, assuming you havent signed a buyers agent agreement which already specifies how much your BA will be paid.
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Old 12-09-2012, 09:09 AM
 
Location: NJ
17,573 posts, read 46,126,539 times
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If you didn't like the price you shouldn't have offered it. Good lesson for you to learn.
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Old 12-09-2012, 09:18 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,773,863 times
Reputation: 3876
I'm surprised, if this was an association standard form, that it didn't have a clause similar to this Arizona contract appraisal contingency clause:

Quote:
Appraisal Contingency: Buyer’s obligation to complete this sale is contingent upon an appraisal of the Premises acceptable to lender for at least the purchase price. If the Premises fails to appraise for the purchase price in any appraisal required by lender, Buyer has five (5) days after notice of the appraised value to cancel this Contract and receive a refund of the Earnest Money or the appraisal contingency shall be waived
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Old 12-09-2012, 09:33 AM
 
223 posts, read 514,530 times
Reputation: 157
It seems like if buyers did the appraisal and inspection in two different steps, they could save 1 of the two fees if the deal fell through. But here on C-D, the poster always claims to have lost both, based on the outcome of one.

Here is a Pan Am photo for you, Captain.
Attached Thumbnails
Can buyer get inspection money back? (CA)-pan.jpg  
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