All Forum Posts by: Abdul Azeez

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.

Quote from @Abdul Azeez:

Quote from @Sergey A. Petrov:

They are stringing you along. Has anyone called the buyer’s agent’s managing broker? Can’t believe nobody can get a definitive decision in four days unless there are very very extenuating circumstances 

Yes the managing broker on my side said in Friday he is waiting on a call back. He said today that he spoke to buyers broker and they are going to see if they can find the difference in price to bring to the table but zilch after that. These updates are now reaching a point where they are not very helpful unless something really happens .

 Is NJ an attorney state or an escrow state? I would flip it over to our attorney in this situation and let them handle it. 

As an agent in CT I can only speak to what we do here. If the language in the contract was "In the event that the homes does not appraise at the purchase price, Buyer will pay upto $5,000 over appraised value not to exceed the purchase price"

In the event that you are talking about, you as the seller accepted the potential that it may not appraise and even with the gap you may not get the agreed upon contract price. You would be out of luck and the buyers would have the right to sue you for specific performance in my market of CT based on what I read. 

They are stringing you along. Has anyone called the buyer’s agent’s managing broker? Can’t believe nobody can get a definitive decision in four days unless there are very very extenuating circumstances 

Don’t have a black and white answer without being privy to the entire transaction. The best suggestion I have is wait it out. It’ll either play itself out and close or you’ll have a mess of an earnest money refund to deal with (again based on the limited info you shared I don’t think you’ll get to keep it). If you’d rather have the answer now, call your agent’s managing broker - they’ll review the transaction.

Hi Abdul, 

Are you in a rush to sell and are the other offers offering more or a gap? Typically when a house doesn't appraise you would renegotiate, but it does depend on the contract and contingencies. I wonder what the difference was in the current offer (appraised value plus 5k) and the one you were hoping to get? Is it significant and is it worth fighting for if others might face the same appraisal issue? This offer at least offers you a 5k gap and you won't have to start from scratch with another offer. 

Don’t have a black and white answer without being privy to the entire transaction. The best suggestion I have is wait it out. It’ll either play itself out and close or you’ll have a mess of an earnest money refund to deal with (again based on the limited info you shared I don’t think you’ll get to keep it). If you’d rather have the answer now, call your agent’s managing broker - they’ll review the transaction.

It could be or it could be something else. Personally if I were the recipient of the notice you quoted, I’d shred it because it is meaningless. If I were representing your buyer, I’d tell them the notice means nothing and they can do whatever they want but there might be an opportunity to renegotiate. And I’d also know that I could string you along while I consider my options and come to you at the eleventh hour and say something along the lines of: we’ve officially been out of contract for a few days and my clients have been thinking about it very very hard, that’s why we haven’t yet pulled earnest money. Closing was scheduled for tomorrow and my clients are still willing to but the appraisal simply doesn’t support your asking price. My clients are still willing to close tomorrow based on appraisal plus $5k but not more. This is not a counteroffer because we are out of contract but I need your decision by 5pm as we’ll be submitting the earnest money refund request or can draft an amendment reinstating the original deal with tomorrow’s closing. The decision is yours. I suspect your additional carrying costs might exceed what you have in front of you and relisting in today’s softening market likely wont produce a better buyer ready to close tomorrow. Looking forward to hearing from you by 5pm. Time is of the essence on this

I am not an attorney but that language is very fuzzy and I suspect may be non binding. A contract is a two way street. One party “expecting” (or assuming as you previously mentioned) another party to do something accomplishes nothing. I bet you the original PSA  language and the buyer’s follow up low appraisal notice formally terminated the deal whether or not they expressly stated so when filling it out and the agents are duking it out trying to keep the deal alive. You are less than a week away (or actually less if they are financing it and their lender would need to the disclosures to them in advance of closing). Wait it out. If they do walk, I wouldn’t hold my breath on keeping their earnest money…

Ok. So you are less than a week away from closing and the buyer hasn’t responded to your “counter offer” (did it have an expiration date on it). The devil is in the details somewhere but the fact that the earnest money hasn’t been refunded is probably a good sign. I speculate your agent is working on the back end hoping to piece this back together and get it to closing. Maybe your agent and the buyer’s agent are negotiating reduced commissions to keep everyone happy. Just pure speculation at this point!