Seller tricked us - Is this legal?

2 years ago

We signed a contract to purchase ($700k) home and entered into escrow. The home inspection showed a lot of repairs, so we decided to cancel the contract. My realtor sent “Cancellation of Contract” to the seller.

The seller called us back saying that they are willing to fix the repairs if we are interested in moving forward. We decided to move forward and ordered an appraisal. The appraisal came at $660 and now the seller is not happy. Our contract stated that if the appraisal comes lower than the contract price, we will pay an additional $10k over the appraised value. In this case, it is $660+$10=$670. Now seller is trying to use the cancellation notice sent by us earlier against us.

Seller’s agent’s response after appraisal: “As you're aware the Buyer cancelled this escrow on 12/23/2021. If your Buyer would like to resurrect this transaction the Seller is willing to at $700.”

Buyer’s agent’s defense: “You are correct that we sent in a cancellation on 12/23/2021. However, you reached out via phone and asked us what we could do to keep the transaction going. In "Good Faith" we retracted our cancellation. I have an email correspondence with you from on Jan 7th stating "We are back in play with this file". We conducted the appraisal to proceed with the file. We provided the lender everything needed to prepare for loan docs. So to reiterate, the cancellation was not finalized AND was retracted. Technically, the seller would have to abide by the contractual obligation of the RPA and honor $670,000 for the purchase price.”

Seller’s Response Back: Seller added their signature to the cancellation notice that we sent them by us one month ago. Told us that the contract is canceled.

Is this legal? Can the seller back out just like that after all of the activities we did?

Featured Answer

sushipup2

2 years ago

I am beginning to see why the seller said "forget it."

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Comments (7)

PRO
Jeffrey R. Grenz, General Contractor
2 years ago
You may have a difficult time proving your contract is still valid based on verbal responses to written notices.
Donald
2 years ago
So you canceled the contract before giving the seller a chance to address the issues the inspection brought up, then you vacillated and now everyone should just ignore your cancellation and move forward?
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User
2 years ago
I want to make sure I am correct. You signed contract at 700k, but due to inspection you cancelled which both parties signed, but then the seller verbally agreed to repairs at original price of 700k? And then the appraisal was 40k lower, so per original contract, you would agree to pay 670k. But now you want the agreement to be 670k plus the seller make all the repairs from the inspection?

Unless there was a written addendum to cancel the cancellation and make repairs, you do not have a valid contract. In addition, just because the contract specified you were obligated to put in up to 10k over appraisal, does not mean the seller is obligated to accept a 30 k reduction in price. It means you are obligated to come up 10k. Is the seller willing to come down to 670k but not perform the repairs? Are you willing to accept those terms? If not, then it Sounds like at this point, you are both better off walking away. Getting an appraisal and an inspection are the cost of doing business. You were contracted to a home needing significant repairs that is worth less than you were going to pay. You would start out upside down.
User
2 years ago
Adding to my comment to say that you don’t say what “lot of repairs” is or the approximate monetary value of those repairs, but if you ordered appraisal prior to those repairs being completed, then the appraisal may have been higher if you had allowed seller to make the repairs first. Honestly, it doesn’t sound like they tricked you, it sounds like you are trying to force a lowball price on the seller.
tete_a_tete
2 years ago
'Is this legal? Can the seller back out just like that after all of the activities we did?'

I don't know, but to me it sounds reasonable.
nickel_kg
2 years ago
Second posting of the same question -- was any new info included? if so I missed it.