Expert: Dick Dennis - 12/16/2010

Question
QUESTION: we signed a contract to sell our house. The appraisal came lower than the price. The contract has a contingency saying that appraisal must meet or exceed the sale price. is that mean our contract is void now because we may change our mind and dont sale our home?

ANSWER: It could mean that the contract is not valid . . . if the parties agree to that, David. At this point the parties must validate that there is an agreement . . . or not. That means if you do not want to sell the property, be sure the buyer gets his deposit returned and make sure all parties sign cancellation papers.

If you insist on the sale price as the price you will sell it for and the buyer agrees, then you can redraw your purchase papers. The Realtors involved can handle it for you. Otherwise go on about your business and I do wish you well.

Dick Dennis
dixiedee13@aol.com

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

QUESTION: our agent is very pushy and he puts a lot of pressure on us over the phone. so we stopped talking to him on the phone but asked him to communicate over the internet that way we have every conversation in writting and he can not pressure us about our desicion. he still doesnt do that but calls us over and over and over and over, non stop! we feel like he is stalking us. we told him our request that we do not want to negotiate our house price or other terms. here is my question. what ever the buyer wants from us and if we dont agree with it and dont sign the addendum or anything else, can they still close it? here is another question. if they decide to bring cash to the closing but we dont agree with it, can they force us to close or? Thank you.

ANSWER: You can point out the reason why you do not have a transaction, David. Point it out to the agents involved and the buyer. However, if the buyer should agree to pay your price, it is necessary to draw up a new purchase agreement. Period. Based on what you have disclosed, as of this moment you do not have a valid purchase agreement. But you may have a valid listing still working. So, if your agent wants to bring another buyer or let another agent bring a buyer, they certainly may. In the mean time nobody can force you to close. Period. Be well.

Dick Dennis

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

QUESTION: Dick, i hope you dont mind to ask you last question. i have received another answer from an expert. He says as below,
 Hey, David.

As I understand it, you have a purchase agreement that both you and the buyers have signed. The appraisal came in at a price below that. If nothing else changes, the buyers can still buy at the original agreement price but they would have to pay the difference between the appraised price and the agreed purchase price. I only know of one person who ever did that, and he was a rich foreigner who didn't care "about American appraisals."

Again as I understand it, but it could be different in your specific state, if the appraisal is the only problem, the buyers would be the ones to cancel the purchase, not the sellers.

If you don't sign any addendums, then the original purchase agreement while hold weight, as long as it was signed by all parties to the transaction. Any other addendums won't matter if you don't sign them, even if they are just explanatory addendums, such as "The purpose of this addendum is to explain that the purchase price shall remain $xxx,xxx, but the Seller will pay $xx,xxx directly to the seller as the difference between the purchase price and the appraised price." Except in rare circumstances, no one cares how the seller pays for the property.

I just wanted ask you what do you think about above advice. I wish and pray that you are right.
Thank you and happy holidays.

Answer
The other person basically said the same thing, David. I just cut through all the words he used in his reply. It boils down too this: Your agreement is not valid if you abide by what the purchase agreement said. The way it is now, if you were to walk away from this transaction, there would be no problems. Your agreement specifically said that if the appraisal does not come up to the purchase contract price it has not lived up to the contingency. It would be for you or your agent to verify if the buyer still wants to buy at the agreed price. This last sentence is the key to the whole thing.

You simply draw up cancellation papers to be signed by all parties and the release of the buyer's earnest-money deposit. If the buyer does not want to sign the cancellation, then you still have a transaction unless you have another contingency standing in the way. I wish you well.

Dick Dennis
dixiedee13@aol.com