Expert: Karyn Foley - 5/21/2006

Question
Can a buyer terminate a contract and receive his earnest money back on the grounds of an unintentional mistake in square footage listing in MLS by the seller agent? Buyer claims the home was no longer the value (per square foot) that he originally thought, and therefore is not obligated to honor the contract. The buyer's appraisal came in where it needed to be, and there are no other contingencies.

Also, if one verbally and over e-mail renegotiates a signed contract (to no avail), does the previous contract become void?

Answer
Dear Janice:  I feel that this is more of a legal questions, and we Realtors are not allowed to practice law (advising legally) without a license.  Also, in all fairness to you, I would have to see the contract itself before even giving an off the cuff response on what I know about such a situation.  However, the home was represented as a specific square footage, without any disclaimers that perhaps this is the footage that appears on a particular document (say, for example, tax records) and that the buyer is urged to confirm this et cetera.  The buyer made an offer based upon ths particular square footage quoted or written initially, and agreed to pay the price agreed upon by vitue of his having factored the square footage into his decision.  This square footage came up lacking on down the line, and is a material fact, because the buyer may not have agreed to pay the sales price determined had the buyer been made aware that the house was smaller.  Thus, you and the buyer may face options such as the buyer agreeing to purchase the home anyway, or that the seller will lower the price, or any other term that can be mutually agreed upon.  If there is no agreement, it may indeed be the case that the buyer can cancel due to an erroneous material fact.  I suggest you look at your contract because it may dictate mediation, arbitration or at the very least, the parties and principals should sit down and try to work it out.  If not, the oonly who can best support your position and educate your appropriately is an attorney.  Best of luck on an awkward situation in which you are put due to no deliberate error.Let me know what happens, please.  Karyn Foley