Expert: Toni Yates - 3/22/2009

Question
QUESTION: The sellers house was appraised for less than the buyer offered,the bank would not loan the buyer any more than that price after all papers were signed.The day before settlement the seller backed out.The buyer payed for interest lock in fee,3& a half %down payment appraisal fee & inspection. and is now basically homeless .What can she do?The house where she rents may already be rented out.

ANSWER: Hi Charlene-
Thanks for the question. I'd really have to see the contract to determine what the options, if any, might be. Where is the agent in all of this?! They should be negotiating further with the seller or seller's agent (who is going to have trouble with it appraising with another buyer) and also busting their behind trying to find another acceptable home quickly. Believe me they are out there for a qualified buyer- which obviously this buyer is. If they don't have a good agent- they should get a lawyer to review the contract. I would think the bank would be willing to put the loan towards another property that appraises. Hope this helps. Best, Toni

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

QUESTION: The Sellerhas already put the house back on the market,can he do that so soon....What do you mean the seller will have trouble with another buyer.How can this happen? How did it go back on the market so soon?

Answer
Hi-
Again it depends on how the contract reads. What I meant was you can ask anything and get anything but it has to appraise for most people to get their loan. If it hasn't appraised once, it probably won't again. Unless it's a cash buyer, it WILL matter. Personally, unless it was a huge discrepancy, I think the seller is penny wise and pound foolish. He has to carry it for that much longer with the possibility that prices may go down or that it won't appraise if he does get more. And in this market! Best, Toni