appraisal is way off

[Jayjay]

My wife and I put down 12,500 on lease purchase home. We signed both a contract to purchase for 109,900 and a 1 year lease @ 974.00 per month. The Contract states no refund of the earnest money we paid up front. The lease expired in the end of January, therefore we are on a month to month. The sales contract does not have an expiration date. when I went in to inform the seller of my intent to obtain a mortgage he wanted to up the price of the home to 114,900. After some discussion I agreed to the price and to an additional 3% increase in the lease. The contract and lease have both my name and my wife's name on the contracts. I did sign my portion, however my wife did not sign her portion of the agreements. My broker (who shares an office with the seller) informed me that the appraisal came in @ 105,000. and of course any lender will not make a loan with a 9,000 difference. Does the seller have to come down in price to meet the appraisal figure or at to the 109,00 price. I feel that the seller is trying to take advantage. My wife and I really want the house. I did notice on the contract that in the event of such situation seller would be required to come down, I made have read it wrong, but that is what I understood in that paragraph. I am confused and very weary of my broker and her ability to protect me during this process.

 

[msattorney]

If you believe the clause in the contract requires the seller to reduce his price to the appraisal price, show the contract to him. If he disagrees, then point out that you want out of the deal since it is not at the price originally agreed to. The seller should understand that no other buyer will be able to get a loan on the house for more thn its appraised value. Your broker should be assisting you in these matters. If you still want the house, consider hiring a lawyer to review the document and write a letter to the seller as to his opinion about the provisions of the contract.