Need some input from other sellers

[Abdul Azeez]

I am an investor who listed a house on sale with a realtor. We received several offers and I selected a loan offer. The contract had a special stipulation indicating that buyer is willing to pay $5k over appraisal if appraisal is less than offer price. After appraisal, although appraisal came higher than list price, it came less than offer price. With the $5k added, it still did not meet my lowest limit I was hoping to get. The buyer was unwilling to go up any higher. So, I asked my realtor to terminate the contract and move forward with a backup offer. However, buyer threatened to sue due to non-performance. After talking to attorney on my side, the listing realtor and broker have clearly said that seller does not have to accept the lesser offer. So, a notification was sent to the buyer than unless they immediately terminate the contract we expect them to close as scheduled. Closing is less than a week away. However, since the seller was unwilling to even come up to a mid-point previously, I highly suspect they will do the offer price. I have tried to follow up multiple times with my realtor and broker and they said they are still waiting for the other side to respond. It's been 4 days. Given that a) closing is coming up next week and b) I am unable to move forward with the back up offer, what do I need to do now other than indefinitely wait. When I follow up, I keep getting the message that they are still waiting for buyer side to respond.

[Charlie MacPherson]

I'm confused.  You say that the offer came in higher than your list (asking) price, but was less than you were hoping for.

The buyer met your listing price and offered up to an additional $5,000 to cover any appraisal gap, bringing the offer even further over the asking price.

If I'm reading you right, you accepted the buyer's offer, but hoped to squeeze even more money out of them based on the appraisal.  That's pretty crappy business on your part.

IANAL, but if you did accept the offer and EMD changed hands, the three basic elements of the contract have been satisfied.  Those are:
1. Offer (the buyer made an offer to purchase)
2. Acceptance of the offer.  (You must have accepted it as you plan to close next week)
3. Consideration (something of value changes hands - normally that's EMD /deposit). 

Unless you had some weird language specifying otherwise, it looks to me that the buyer has a case, because a contract has been formed. 

This, it seems to me, is all on you.  You listed at a price lower than you wanted and somebody bought it. 

I get that in the red hot seller's market, one strategy is to list low and get a bidding war going.  But it sounds like you accepted the offer and formed a contract when you did so. 

If I'm reading this correctly, this is a serious mistake on your part and you could be sued for specific performance, meaning that a court will force you to honor the terms of the contract.  This is Contract Law 101 and I'll bet your attorney will agree.  The only way out is if the buyer fails to meet any of the other terms of the contract.

BTW, put yourself in the buyer's shoes for a moment.  The asking price was $1.00, but you really hoped for $2.00.  He offered $1.10 and the appraisal came in for $1.15, which he agreed to pay.  Now you want him to pay $2.00 for a house that just appraised for $1.15.

Why should he pay more than the actual value of the house?  Just because you want more?

Good luck.  Honor the contract you signed and close on the sale.  Take your lumps, learn a lesson and move on to the next deal.