Lender shared appraisal with seller

[John Roesler]

In the process of closing on my second property, a duplex in Saint Paul, the appraisal came back with an asterisk related to some basement water issues. The lender won’t close until the seller addresses the issues. So, the lender sent my appraisal to the seller to show the items that needed addressing. I paid for the appraisal, so that’s my property right? I didn’t give permission for it to be shared and now the seller knows the house appraised for a decent amount more than what we agreed to for purchase price. I’m worried the seller might back out now and list again. What should I do?

[Donald Robers]

The seller accepted your offer.  Unless there is language in the Offer To Purchase that empowers the seller to back out if he discovers he underpriced his property (and why would you sign such an offer?) you could sue for specific performance.  And it may not come to that.  The seller may do the right thing and honor the contract.

For your part, since this is a matter upon which your financing depends, the option is there to back out of the deal as long as you have a financing contingency.  You can get your earnest money returned and the seller would have to disclose the water issues to future buyers.  You might mention this should the seller prove difficult.

Definitely express your displeasure to the bank - after you get your money.