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House did not appraise

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M

Melog

Guest
What is the name of your state? California
The appraiser the lender sent out appraised the value of the home to be $45,000 less than the purchase price. Our agent recommended we get a 2nd appraisal for which he was willing to pay for. The lender didn't mind. The 2nd appraisal came out $10,000 less than purchase price. We attempted to re-negotiate the price to match the appraised value. (We checked the "must appraise" box on the purchase contract). The irrate seller went out and got his own appraisal that came in at full price. I did not accept this appraisal and re-requested the price come down to match my appraisal. The seller refused and sent us a statement that he would reduce the price by $5,000 if we signed an agreement. Seeing this as a compromise we agreed. After we moved in, the seller is now attempting to bring us to mitigation to effectively sue us for the $5,000.
What can I do? Getting legal counsel will probably cost almost the entire $5K! Do you think he has a case? Oh, and the seller is a lawyer. I appreciate any help you can provide.
 


HomeGuru

Senior Member
Melog said:
What is the name of your state? California
The appraiser the lender sent out appraised the value of the home to be $45,000 less than the purchase price. Our agent recommended we get a 2nd appraisal for which he was willing to pay for. The lender didn't mind. The 2nd appraisal came out $10,000 less than purchase price. We attempted to re-negotiate the price to match the appraised value. (We checked the "must appraise" box on the purchase contract). The irrate seller went out and got his own appraisal that came in at full price. I did not accept this appraisal and re-requested the price come down to match my appraisal. The seller refused and sent us a statement that he would reduce the price by $5,000 if we signed an agreement. Seeing this as a compromise we agreed. After we moved in, the seller is now attempting to bring us to mitigation to effectively sue us for the $5,000.
What can I do? Getting legal counsel will probably cost almost the entire $5K! Do you think he has a case? Oh, and the seller is a lawyer. I appreciate any help you can provide.

**A: did you close and record already? What agreement did you sign reducing the price by $5K?
 
M

Melog

Guest
Yes, we closed escrow on January 14th. He originally had us sign a statement saying that "We demand the price be reduced..." and then we all signed an amendment to the purchase agreement. Bottomline: The ammended price was signed by both buyer and seller. His letter to us via "certified mail" stated that we "breached the purchase agreement by improperly demanding and coercing a reduction in the agreed upon purchase price without legal or ethical basis for doing so."
 
M

Melog

Guest
Just wanted to add that we refused the appraisal that he did for the following reasons:
1. It went out of our the neighborhood for comps even though there were several comps available in our neighborhood.
2. The comps that were valued higher than our home were mostly pending sales. (all but 1)
3. Every sale and pending sale that he used had a pool and a spa where our new home has neither.


Thanks for your help!
 

HomeGuru

Senior Member
Melog said:
Yes, we closed escrow on January 14th. He originally had us sign a statement saying that "We demand the price be reduced..." and then we all signed an amendment to the purchase agreement. Bottomline: The ammended price was signed by both buyer and seller. His letter to us via "certified mail" stated that we "breached the purchase agreement by improperly demanding and coercing a reduction in the agreed upon purchase price without legal or ethical basis for doing so."

**A: that is a load of BS.
 
M

Melog

Guest
I agree. Any suggestions on how to make this go away without paying a bunch in legal fees? We are currently thinking of having a lawyer right a letter stating that he has no case. (which will probably cost $600 or more). At this point, I doubt he'll stop there. I think he just wants me to have to spend money in order to defend against this. I think he's abusing the fact that he's a lawyer and it doesn't cost him anything to go to mitigation against us. Is there a way to just get this thrown out?
 

HomeGuru

Senior Member
Melog said:
I agree. Any suggestions on how to make this go away without paying a bunch in legal fees? We are currently thinking of having a lawyer right a letter stating that he has no case. (which will probably cost $600 or more). At this point, I doubt he'll stop there. I think he just wants me to have to spend money in order to defend against this. I think he's abusing the fact that he's a lawyer and it doesn't cost him anything to go to mitigation against us. Is there a way to just get this thrown out?

**A: one option you might consider is having the appraisal reviewed by a FNMA review appraiser. There 3 factors that you posted are inconsistent with uniform appraisal standards and with the ammunition form the review appraiser you can threaten to file a complaint with the state against the appraisers license. That may force the appraiser to point the finger at the Seller/attorney citing "he told me to do it like that"
Using comps that are outside the neighborhood when neighborhood comps are available and comps for pending sales (not closed) is a no no. There are times when comps are used for pending sales if those pending sales have all contingencies removes and are ready to close, but that is risky for the appraiser.
If no negative adjustments were given on the comps that have a pool/spa in relation to the subject property with no pool/spa, that is another grossly incorrect appraisal methodology.
Another option would be to file complaints with the CA Bar Association, Supreme Court and the Association/Board of Realtors if this individual has a real estate license.
 

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