Q : The appraiser put both the “as is price” and the” price after repairs” on the appraisal report. the bank picked up the “after repairs” appraisal price on the commitment letter. The “as is value is $7K lower than the purchase amount. The bank sent me an email advising that the house did not appraise and that we had to renegotiate with the sellers 3 days before closing, of course the sellers refused, instead sent me a time of essence letter (we are 8 days past the closing date) can i be sued even though the bank will not finance?
A : I ask that you get out & look at your purchase agreement. There usually is a ‘mortgage contingency’ clause in the pre-printed wording. In this clause, it should state that in the event financing cannot be obtained, the agreement shall become null & void with deposit returned to the purchaser. Due to the fact that the appraisal came in low & the bank would not issue the loan without a price adjustment, it seems that since the sellers refused – then, financing cannot be obtained. Ask your agent about this. If you need, go a little further & consult a Real Estate Attorney.