FSBO-VA Appriasal Value Under Asking Price

i am the seller of a home located in michigan. we have signed a purchase agreement agreeing on a sales price of our minimum acceptable price. our friend, who is a local real estate agent assured us that this house could sell for a minimum of this price. however, the va appointed appraisal came in at $4,000. less than agreed upon. we are not willing to accept the appraised price. in the meantime, believing there would be no problems to arise, we allowed the buyers to move into the property because they needed to vacate their residence. we have no signed lease. we have offered to allow them to stay for the month of august using their earnest money deposit as rent while they search for another residence. my question is...what exactly do we need to do to protect ourselves in this situation? and, do they have any grounds for legal recourse?

[HomeGuru]

Thank your agent for advising you incorrectly on numerous counts:
1. an agent is not a real estate appraiser so should not have declared a value of the property.
2. A Seller never lets anyone occupy the property without a written lease even if month to month and especially if the ocupants will not be the actual Buyers.
3. A Seller never allows the occupant tenants to use their earnest money for rental purposes.

Either get them out so you can sell the property or reduce the sales price to reflect the VA appraised value. Thanks to your real estate agent, you have created a L/T relationship. Guess what? If the occupants have no where to go, they will stay put. If you try to kick them out, it may take several months to evict them.

[Edited by HomeGuru on 07-23-2001 at 12:15 PM]