different-seller threatens to sue

[tom1975]

What is the name of your state? Texas
I qualified for a loan sixty thousand dollars more than the price of the home I was trying to buy. The house in question appraised for asking price, but due to no COMPARABLES in the area, the bank's market value of the house was considerably less than the asking price. I then tried a second mortgage company with the same result. Because of the house's initial appraisel and my credit score (744) all parties involved thought the sale was a done deal. Therefore I asked for and was GRANTED PERMISSION from seller to make minor repairs to the house to get ready for move in. I painted the home's interior and even had custom gates built and installed on the fence, as there were none. When the sale didn't go through, I told the seller to keep the gates and enjoy the paint as I was not asked to do these things and I do have manners. I then received a call from seller saying a local prominent real estate broker had viewed his home and told him it was worth much more than he was asking of me and that I was trying to pull a fast one and back out of the deal. I'm thinking this broker just wanted the contract to sell his home but seller then tells me he's contemplating a lawsuit against me. I currently possess the two property appraisels I had to pay for proving my case. The seller has asked me for a copy but I don't know if I should give him one or if I should wait for him to sue, then counter. Am I liable for anything or can I counter-sue the seller and broker that put this idea in seller's head? After all, I think a reasonable Jury would believe fault in this case is on the seller as he is asking much more money than the home is worth. Which is perfectly fine with me. I think everyone has the right to ask whatever they believe their home is worth, but when the home was ultimately valued just too low for me to be able to pay the difference, I didn't blame the seller for anything. I just tried to cut my losses and began looking for another house. I think it's the seller's responsibility to know the home's value- not mine. I can't imagine what I could be held liable for. Any advice is appreciated.

[pojo2]

Simple. Does you house have a loan contingency? If not why not?

If you got the same results from 2 different lenders then why did you at that point think everything was a done deal?

[JETX]

Originally Posted by tom1975

When the sale didn't go through, I told the seller to keep the gates and enjoy the paint as I was not asked to do these things and I do have manners.

Why didn't the sale 'go through'??
Did you have a 'financing contingency clause' in your purchase agreement??
What is the EXACT wording of the clause that you used to terminate your contractual obligation??

I then received a call from seller saying a local prominent real estate broker had viewed his home and told him it was worth much more than he was asking of me and that I was trying to pull a fast one and back out of the deal.

Doesn't make sense. Why would you back out if you were buying UNDER valued??

I'm thinking this broker just wanted the contract to sell his home but seller then tells me he's contemplating a lawsuit against me.

On what basis???
What is his claim??

Am I liable for anything

No one can answer as... we have no idea what your theory is/was to terminate... or what they are claiming.

or can I counter-sue the seller and broker that put this idea in seller's head?

Nope.

[HomeGuru]

[quote=tom1975]What is the name of your state? Texas
I think it's the seller's responsibility to know the home's value- not mine.

**A: you're wrong****************************

[tom1975]

This is the deal. The house appraised for asking cost from the beginning. Therefore the word I was getting from Agent, mortgage broker was that there couldn't be any other problems. The mortgage then goes to the underwriter and because of no COMPERABLES in the area (No house of this size has sold for this much money in this particular neighborhood). Then loan didn't go through. I had already done the improvements to the home. I was ignorant to this situation so I talked with another mortgage company and they told me they thought they could get the deal done based on the aforementioned information. The seller, being told the same thing I was, (that everything was going through) went ahead and bought another lot and began construction on a new home. He thinks I'm responsible for that. I do have the mortgage contingency and not only that, the contract was set to close a month ago. I was going to sign an addendum to apply more time for closure but because of the way things were going, I didn't. So I'm thinking I'm safe because of the mortgage contingency and the contract being expired, but after myself as well as Agent and mortgage broker told seller all this, he's still not satisfied and believes his home should appraise for more- he thinks this is the "Price Is Right" or something. I've never been through anything like this and am just worried, since people can sue for any reason, if I'm liable for him moving out and buying the other property. Again, I made sure the house appraised in the very beginning-this isn't my first time, but this COMPERABLE thing-there had to have been a similar size home sell for similar price in the same neighborhood to get ANY mortgage on ANY house unless you've got a lot of cash to put down. This was the whole problem and I was never made aware of this untill the end. thanks for the replies.

[tom1975]

just to be clear. I never tried to back out. I was a completely qualified and willing buyer. I put forth all the extra effort to get home, but after two attempts at a mortgage, I think that was an honest enough attempt. Both seller and I lost out on this deal and I don't see how it's my fault that he decided to go ahead and purchase other property. thanks.

[Shay-Pari'e]

What I do not understand, is that it is the job of the appraiser to look into the comparative home sales in your area. That is a part of the appraisal.

[tom1975]

I left this out. When the appaisel was done, there were absolutely no comparables in the area, therefore the appaiser used comparables from the next closest neighborhood. the underwriter would not accept that, hence no loan.

[pojo2]

Both you and the seller forgot one very important point, and it is why people do not allow other people to move into a house BEFORE the papers are ALL onked.

It 'ain't' done until every paper is signed and you have the keys in your hand. Until that point anything can and sometimes does go awry.

[Reloing]

If there was a contingency clause in your purchase contract stating that the purchase was contingent upon your being able to obtain financing, then there is about a 99% chance you are off the hook. If you fulfilled all the requirements to seek financing and if you were not able to obtain it through no fault of your own, then .... game over. It just didn't work out. Be sure and check the fine print. Did it require you to notify the buyer by a certain time if you were not able to obtain financing? Did it place restrictions on the reasons you might get an "out" under the financing clause? If two legitimate mortgage companies are unwilling to underwrite the deal, the option to cancel the contract is one of the major protections that sort of clause gives to the buyer. If you think it would be persuasive, you might show him the refusals you received. It would be a good idea to provide a cover letter explaining that you are disappointed that the deal could not be completed but that your inability to obtain financing, through no fault of your own, was the reason why. Or might also talk to a lawyer first. Often reasonable people of good will can settle matters without lawyers or courts. Ill will and greed can, unfortunately, hamper this process. Good luck!

[Gadfly]

If comps are not available, then why didn't the appriaser switch methods?

Is this home so out of class for the neighborhood that it's a bad investment?

Did you inquire of the lender what kind of appraisal WOULD be acceptable considering a lack of comps?

[HomeGuru]

Originally Posted by Gadfly

If comps are not available, then why didn't the appriaser switch methods?

**A: explain?
*********
Is this home so out of class for the neighborhood that it's a bad investment?

**A: I agree.
*********
Did you inquire of the lender what kind of appraisal WOULD be acceptable considering a lack of comps?

**A: the value stated.

[dallas702]

Well, you're not responsible for your seller's new lot and construction expenses.

You should have questioned the competency of the appraiser. Doing comps is just an easy way to establish value, but it is like having a grade schooler look at a list of numbers and determine the median. The appraiser should have used one of the more appropriate methods. In fact, comping to a different area is totally bogus and purely lazy. Go find a real appraiser and get your money back from the other posers.

Can you come up with the difference between your loan and the seller's price? Or, somewhere in between? How much of a difference is there?