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RealEstateAnswer
RealEstateAnswer, Lawyer
Category: Real Estate Law
Satisfied Customers: 23976
Experience:  9+ years in handling Leases, Landlord-Tenant, Foreclosures,Mortgages, and Eviction cases
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I'm currently under contract to buy new construction

Customer Question

I'm currently under contract to buy new construction housing. Two issues: The appraisal didn't come back to what was needed and the builder wants me to come out the difference (makes sense). However, in the "options" stage, it was consistently told to me that all of the hosues appraised for the upgrades and not to worry. Even on the "upgrade" sheet, it explicity says, "Options financed in mortgage". The realtor (acting as sellers/buyers agent) admitted they didn't have any issues with appraisals -- This is the first one... Any advice?
Second - It was stated on the flyer there was RV Parking. We just did the final walkthrough. There isn't. They claim I signed off on the site plan and should've known. I told them that in communications and on the flyer, it was known I was looking for RV Parking. They won't budge and say the flyer "isn't guaranteed" and I should've understood the site plan. Any advice here?
Thanks.
Submitted: 11 months ago.
Category: Real Estate Law
Expert:  RealEstateAnswer replied 11 months ago.

Good morning. Was financing a condition of the sale? Also, was it in the site plan and in writing, that there would be no RV parking?

Customer: replied 11 months ago.
Financing was condition of the sale. There wasn't anything written about NO RV parking... Only on the flyer it said there was RV Parking - Realtor says that it is boiler plate information they put on all of their flyers
Customer: replied 11 months ago.
I can get my Earnest Money Deposit back if I walk away, but the upgrades/options I chose that I had to put 50% down on, I lose that... Total is about $20K
Expert:  RealEstateAnswer replied 11 months ago.

Thank you for the additional information. If financing was a condition to the sale and you were not able to obtain it, as a result of the appraisal coming back low, then you could have grounds to walk away. The builder/seller set the price and this was what was agreed to, so if they do not want to lower the price to the appraised amount, you could likely walk away and be entitled to a refund of your deposit. Of course, if you want to, you can come out of pocket but that is at your discretion. It goes hand in hand with the RV issue, since if that is key to you buying and you now know it is not available, you could back out, assuming they do not lower the price. Now, you also want to read anything you signed about the upgrades and if those was NOT a condition to the sale and financing. If it says this will be lost no matter what, then it is something you agreed to and everything should have been conditioned on the financing, since they set the price based upon what the market allows and what you can get financing for.

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Customer: replied 11 months ago.
I feel as if both were a bit of a bait and switch -- The financing was assumed to be okay, they had me sign various documents saying I would come out of pocket should it not appraise -- But, then say it will appraise (They've admitted to it via email). The RV issue, likewise, seems as though it was always going to be there, and at the end -- It is not.I don't want to go the legal route, but will if need be -- of course, arbitration first -- And even then, would I go after the realtor, the builder, or the "Upgrade" company that explicity stated it would be financed in the mortgage?
Expert:  RealEstateAnswer replied 11 months ago.

I do understand. In situations like these, what is contained in writing, will control. That is what they will rely on. Yes, you can argue that something was said or that they presented something which you lead you to believe that X or Y would happen or be present but at the end of the day, the Judge is going to look at and they are going to argue that what was signed and agreed to in the contract, is what will control. Even though they said financing would be ok, there was still language which said you may have to come out of pocket. That was known and clear and a risk, as well.

Customer: replied 11 months ago.
that is where the RV Parking comes into play -- It was written in the flyer (albeit, with the disclosure of "Information herein is deemed reliable, but not guaranteed". It wasn't explicitly written anywhere that there was NOT RV Parking, but I relied on the information they gave me that there was. So, my thinking is that they reduce the sales price by the present value of the amount I will need to pay out of pocket for RV Parking for a period of time (figure $200/mo at 30 years *mortgage*), or sue them for misrepresentation of the property for the RV -- do you think that is legitimate?For the financing, I will concede, and agree with you... It was all on paper...
Expert:  RealEstateAnswer replied 11 months ago.

I think your proposal is reasonable although they may stand firm on the disclosure in the flyer and then advise that you did not ask them thereafter if this would be present and relied on what was there, when it stated it is not guaranteed. It is hard to demand that when there was a disclaimer and you will be asked at trial, if at any time thereafter they told you that there would be one and if so, why it was never in writing as part of the plan

Expert:  RealEstateAnswer replied 11 months ago.

I just wanted to follow up and see if you had any other questions or needed me to clarify something. I am here to help, so please let me know. Thanks!

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