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This is sad. If the seller quickly found a buyer willing to pay more than you were, it looks like the seller was itching to get out of the purchase agreement and your bank's antics seems to have helped the seller.
Regardless, unless you used a non-standard P&S agreement, your agreement is likely to have a long contingency. If you do, you shouldn't lose your earnest money?
Please tell me that you chose the title company (aka closing agent) and that they or your real estate agent has the check you made out towards the earnest money.
Is the OP getting a second loan as part of his funding?
If it is brokered out to another lender, it is not unheard of for the 2nd lender to order another appraisal.
I had a 2nd lender on one of my listings in an 80/10/10 do a desktop appraisal that came up short the day before closing. Thank goodness the buyers had the wherewithal to can the second loan and make a 20% down payment. Otherwise it may have become interesting.
When the lender came up with the 2nd appraisal requirement right then and there the phone lines start burning. You get the lender to communicate with the seller to get an extension.
Although tragic it is important to remember that the seller didn't walk away, you failed to perform. The OP began the process by dealing with sharks. No matter how nicely people smile, business is business and never expect any leeway, it prevents disappointments.
As someone else said, get a lawyer. Never trust the ethics of anyone other than yourself. That might seem like a callous way to go about things but better to be that way than what the OP is going through.
If you end up suing, bring suit against everyone, the seller, the lender and anyone other than yourself. Make it such a big deal the easy way out for everyone is to get you the money. Of course, the legal fees aren't going to be free so hopefully a few letters gets things accomplished.
Before paying an attorney, and taking that stance, I would find out why there was a second appraisal, or why the appraised value was cut. And I would read my contract.
Then, I would lean on my realtor, because if he/she can't do whatever dance it takes to get your earnest money back, I wouldn't think you'd stick with that realtor.
Lots of stuff going on here. As long as you do not approach the seller or their agent with the hostility that oftentimes comes with not really know what is going on, you might end up fine.
This. I've only heard of a 2nd appraisal done at the request and expense of the buyer, if there was a major problem with the first appraisal.
They will order a second appraisal on a flip that is re-sold within 90 days of the last purchase for an FHA insured loan as well. It has to be within 5% of the first appraisal, otherwise the lower of the two appraisals becomes the one that FHA uses.
I've always said...... Never put down more than $1000 in earnest money. The headaches are not worth it. So if and when issues like this come up, you can simply walk away, or bring it to small claims court without a lawyer. Although they grumble and scream, I've never had a seller refuse my $1000. Why? They want to sell the darn house!
You're obviously not buying more expensive properties. We will ALWAYS negotiate for much higher earnest money if the property is more expensive. Last thing I need as a listing agent is for a buyer to not have any skin in the game. And I've never had a buyer NOT pony up a fair amount.
Maybe I'm missing something, but it sounds like you voluntarily removed a contingency that you really shouldn't have. The seller, under those circumstances would be entitled to the earnest money. That's what it's there for. If the seller had to give back earnest money whenever a buyer failed to perform to a contract then earnest money would be useless.
Now, there are lots of specifics that I'm sure I don't know about so you definitely need to talk to the attorney you are using for your transaction.
When the lender came up with the 2nd appraisal requirement right then and there the phone lines start burning. You get the lender to communicate with the seller to get an extension.
Although tragic it is important to remember that the seller didn't walk away, you failed to perform. The OP began the process by dealing with sharks. No matter how nicely people smile, business is business and never expect any leeway, it prevents disappointments.
As someone else said, get a lawyer. Never trust the ethics of anyone other than yourself. That might seem like a callous way to go about things but better to be that way than what the OP is going through.
If you end up suing, bring suit against everyone, the seller, the lender and anyone other than yourself. Make it such a big deal the easy way out for everyone is to get you the money. Of course, the legal fees aren't going to be free so hopefully a few letters gets things accomplished.
My take is there was still a few days in the contract.
WF left me standing at the alter... they had everything for the loan and it was a 45 day close.
On day 41 the SELLER e-mailed to say she is sorry it didn't work out???
I get on the phone and learn the title company learned my loan application was denied because they missed the fact the home was on 5.1 acres and they only make loans on homes on 5 acre or less parcels... it wasn't like the appraisal or listing agreement didn't provide this information.
So I call everyone and the story is the same... sorry it didn't work out and they have already found another buyer and I say I still have 4 days which is ignored!!!
To make a long story short paid cash for the property and closed on time...
Still burns me up that I was the last to know there was a problem
By the way... I got every penny I paid for the loan app, appraisal and credit check refunded AND a free copy of my appraisal.
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