Expert: Dick Dennis - 10/6/2009

Question
QUESTION: We opened escrow on a property in CA, after seller accepted our offer ($560k) with as-is condition & no-loan (financing) contingency.  But unfortunately the loan is pending because the house is in the middle of a bathroom remodeling. The lender would not approve the loan before completing the bathroom. We are willing to complete the remodeling on our cost prior to close of escrow. However, seller does not cooperate & allow us to complete the work. Even they put their house back on the market without informing us and releasing the contract. Now the house is active in market from pending status.

I would like to get some advice; The loan is pending (appraisal pending) due to in-completed remodel work of the house. And seller does not cooperate to complete the work. Is this our fault not to get the loan approved?

In CA purchase contract form, there is only financing contingency terms, but no appraisal contingency terms. Does financing contingency imply the appraisal contingency?

While we opened an escrow and are still in binding contract, seller put their house back on the market without informing us and releasing the contract. Is it OK for seller put their house at higher price ($600k) on the market without saying anything to us? Does the listing agent violate any RE laws/rules?

In case of the breach of the contract by seller, what should we do to get the remedy on this issue? Don’t we have any choice but to cancel the deal? Can we sue for specific performance on this issue such as lis pendens?

Thank you so much for your time.


ANSWER: As long as you still want the house, Ashley, the seller cannot pull out of an agreed-to and signed purchase contract without your approval. Therefore, you will need to engage a good local real estate attorney to enforce a specific performance in this matter. Obviously what has happened is that the seller spent more bucks with the bathroom and was hoping he could sell it for a larger price than the one he agreed to with you. As long as you still want the house, get that attorney on the job (you should be able to have the seller pay your attorney fees in this matter if you should win). Most likely, you initialed or signed a mediation agreement in the purchase document. If you did, then you must first go through that process before you take this matter to court. WHERE IS YOUR REALTOR IN THIS? Seems like that person is a wishy-washy dishrag to me. He/she should have been fighting for your interests all the way through. I do wish you well.

Dick Dennis
CA Broker Lic. #00349415
dixiedee13@aol.com

---------- FOLLOW-UP ----------

QUESTION: Hi, Dick Dennis,

I appreciate for your answer. Still, I would like to get it clear one thing before I proceed the case. The loan is pending (appraisal pending) due to in-completed remodel work of the house. And seller does not cooperate to complete the work. Is this our fault not to get the loan approved? Many thanks! Ashley  

Answer
I'm a California broker, Ashley, not an attorney. The way I see it, should your pending loan not be approved because of the appraisal because of the incompleted work, a good attorney would jump on that as the reason why you were not the buyer after all. Again, where is your real estate agent in all this? That person should be fighting for you. Very inefficient. Am I getting the feeling that you tried to buy that property WITHOUT a real estate agent on your side of the transaction? I certainly hope not. You take care of yourself.

Dick Dennis