Selling to a T/B and a year later it's worth LESS?

[Tmartinloan 0]

HYPOTHETICAL EXAMPLE

 

Just say I find a seller willing to sell for $100,000 and I find a TB and do a CA for $105,000

 

1. I collect $5000, Seller agrees to $200 rent credit towards to purchase.

2. In one year the buyer has $5000 + $2400 in rent credit totaling $7400 towards the purchase.

3. Buyer is ready to exercise his option and gets approved for the an FHA loan.

4. FHA Appraiser goes out and the property now appraises for $90,000. and he cannot get a loan. Now What?

 

I know I got paid that's great and all, but am I liable to anyone?

What do I suggest to the T/B and the seller?

I'm sure this has really happened to a few of you how do you handle this situation?

 

I appreciate any input.

 

Thanks

Thomas Martin

[Jonathan RexfordFL 8]

Remember it is an OPTION. The tenant/buyer has the OPTION to buy. They don't have to buy. Seller can say, lets go another year. I am not a fan of uping the value beyond market value. I use to do it several years ago. But I am more inclined to sell at or below market.

 

Now are you liable? I would say no. But you can be sued for anything.

[MichaelC 160]

These past few years, the likelihood of that happening isn't so unusual. If it does happen to you, there can be only a few possible outcomes.

First, the homeowner can be more flexible on the price and lower it to meet the appraisal.

Or, if the buyer is still willing to pay the higher price, the homeowner can help by offering a second mortgage to make up the difference.

Or, the homeowner can say the deal was what we said and I'm sticking to it, in which case the buyer has a decision to make.

You asked if you are liable. Possibly. These days, anyone can sue anyone else for any damn reason. Hell, we even have websites geared towards this mentality: WhoCanISue.com. However, Thomas, when you are assigning the deal, the wording on the Assignment Agreement releases you from any liability. Also, there is a financial disclaimer in the Option to Purchase Agreement, which states that the availablility of financing is not guaranteed and is not a condition of performance.