Wrong lot size on MLS, under contract in due diligence period

30 Replies

Help Help Help!!! We are first-time homebuyers in NC and are going through a very tough situation.

We recently went into a contract and are currently under the due diligence period. We found that the Seller agent mentioned the wrong lot size (approx 40% higher than the actual lot size) on MLS and decided to back out. But Seller declines to give our DD amount or to further renegotiate, though it is a big mistake from them. The seller's agent simply corrected the MLS now and claims that it is just a typo.

- What action can we take on the Seller's agency or Seller, to get our DD money? We are still under the due diligence period.

Please Help!!! We are first time home buyers in NC and are going through very tough situation.

We recently went in to a contract and currently under due diligence period. We found that the Seller agent mentioned wrong lot size (approx 40% higher than the actual lot size) on MLS and decided to back out. But Seller declines to give our DD amount or to further renegotiate, though it is a big mistake from them. Seller's agent simply corrected the MLS now and claims that it is just a typo.

- What action can we take on the Seller's agency or Seller, to get our DD money? We are still under due diligence period.

Thank you!

Thats why you pay due diligence money in North Carolina....to do due diligence. You did your due diligence and decided you didn't want to buy the property and decided to opt out of the contract. 

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No, again, thats what you paid the money for...for them to take the property off the market so you can do your due diligence. You did your due diligence and decided not to proceed. You dont get the money back. 

@Tikka Koti, Joe Splitrock above just provided the NC Real Estate Commission guidelines on when DD is refundable. Your real estate agent is NOT the person to interpret if this is a material breach, you will need to pay an NC Real Estate attorney to do this. While I have never personally gone done this road it is my general understanding that the chips are not in your favor, unfortunately.

@Tikka Koti Are you planning on adding a second building and now the lot size is too small per zoning? Or what you considered part of the parcel is now known to be a neighbor's land? Or just feel cheated? Because if you were happy with the house prior to discovering the lot was smaller than stated then just buy it...or forfeit your deposit if you think it will eat at you forever. Everyone gets buyers remorse. There is also remorse for not buying. I have suffered both.

@Tikka Koti I assume you have seen the property before you made the offer? It's a bad typo and it should not have happened, but hoestly most people have no idea if what they are looking at is a 1/4 acre or 1/2 acre. Heck, it is hard for me to tell sometimes. If the yard is big enough or not is often a very subjective issue..

Is that the reason you want to kill the deal or was there something else?

If you simply got cold feet, know that this happens to a lot of people. Step number one is to acknoledge that. Revisit the resons you made the offer in the first place. Are these resons still there? Buying your first property can be emotional growth process; you have to get comfortable with being a little uncomfortable sometimes..


PS - you killing the deal is causing real financial damage to the seller, they have to go back to market and look like damaged goods now. This is exactly why you give them EM in the first place.

@Tikka Koti I don't understand what everyone is saying, maybe this is a NC thing but everywhere I have bought properties if you are under DD period and cancel for any reason at all, the EMD is refundable. If this is not the case, did your agent promise you that your EMD is protected during DD?

Originally posted by @Allen L.:

@Tikka Koti I don't understand what everyone is saying, maybe this is a NC thing but everywhere I have bought properties if you are under DD period and cancel for any reason at all, the EMD is refundable. If this is not the case, did your agent promise you that your EMD is protected during DD?

it sounds like DD deposits are NON refundable in that state.. its like that in TEXAS with option money you will find many TEXAS contracts to have 100.00 options for 2 weeks which coincides with your 2 week inspection period.. you chose not to go forward you lose the 100.00 its not EMD its something different.

I am also not a NC real estate agent, but my MLS has every edit to a listing recorded and time and date stamped. I would ask your agent to go back into the records and collect the edit history on the listing for your own records going forward.

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Thank you all for your feedback!

I totally understand DD fee is generally non-refundable, with an exception of the clause if 'Seller breaches the contract'.

- Wouldn't this be counted as a breach since the lot size mentioned on the MLS is very significant (Over 40%)?

The lot size was one of our key criteria for getting in to contract. Also, we gave a big amount on DD. And you are right, we couldn't even doubt it until we visit the house for a second time. Even the agent's estimates or appraisal are based on this data. We provided them (agents) with the actual data. They have just changed the MLS and now conveniently describe this as a minor typo from them. Maybe they are taking advantage of any loopholes in NC real estate law?

How large of a yard or you talking about. Is it 10 acres 200 Sqft? 

So you saw the house with the yard and liked it so much you made an offer. Then you found out it was a typo and now you hate it. It doesn't make sense to me.

Good, you're in NC so I can at least help a bit. I attached a screenshot of our Offer To Purchase And Contract that is very clear when it comes to DD money. What you're attempting to due is prove a material breach of the contract because the agent had the incorrect lot size. My advice: Talk to a real estate attorney

Once you pay the DD money, it's all over. That's the seller's money unless they breach the contract. Only an attorney can confirm whether or not they did. This is how people get hosed in an extreme sellers market. When DD starts going up, stuff like this starts to happen.

Best of luck!

Originally posted by @Allen L.:

@Tikka Koti I don't understand what everyone is saying, maybe this is a NC thing but everywhere I have bought properties if you are under DD period and cancel for any reason at all, the EMD is refundable. If this is not the case, did your agent promise you that your EMD is protected during DD?

Some states have a due diligence, or an option fee that is paid from the buyer to seller for the right to conduct inspections. This is completely separate from an EMD, and there will typically be an EMD in addition to the Due Diligence/Option fee paid after the due diligence period. NC and Texas are the two that come to mind that use this. The fee is non-refundable, as opposed to the EMD which is often refundable.

Originally posted by @Craig Janet:

How large of a yard or you talking about. Is it 10 acres 200 Sqft? 

So you saw the house with the yard and liked it so much you made an offer. Then you found out it was a typo and now you hate it. It doesn't make sense to me.

She indicated it was off by 40%.  So if you were interested in a house with an acre and it turned out to be 3/5 of an acre it would not make you reconsider?

@Greg H. It depends on what my plan was for the property. If the property was being used as a SFR and the difference in lot size wouldn't change the rental price or the arv I was expecting then it really wouldn't matter. In that case I might (and I mean might) go back to the seller and renegotiate the price a bit (maybe get like 1 or 2k off the price or something), but would most likely still move forward with the purchase.

If on the other hand the additional lot size was central to the strategy of the property (ability to sub-divide or build an adu, and addition, or get a zoning variance etc.) then I would most definitely re-run the numbers, and then go back to the seller with what the updated price should be with the adjustment. If the seller wasn't willing to budge then you walk away, and definitely consult with an attorney knowledgable in the specific state as earnest money, and the due dilligence process varies greatly state by state (as well as what is outlined specifically in the aos).

This is also why it's tantamount to really understand what you are signing when you write offers, and know all of your back out points and when you can walk away from deals and how earnest money is handled. If you don't understand this when reading through your aos please ask questions of the real estate agent, a local investor, and/or a local real estate attorney. It will save you so much time and potential headache in the long run.

How much money did you give for your due diligence money? Often times people will give 1% for earnest money then 100-150 dollars for their due diligence money. The DD you gave is not refundable. They can keep it as they take their home "off market" for you to inspect and see if you like it. But if you decide to opt out the DD belongs to them. 

Originally posted by @John Brodeur:

@Greg H. It depends on what my plan was for the property. If the property was being used as a SFR and the difference in lot size wouldn't change the rental price or the arv I was expecting then it really wouldn't matter. In that case I might (and I mean might) go back to the seller and renegotiate the price a bit (maybe get like 1 or 2k off the price or something), but would most likely still move forward with the purchase.

If on the other hand the additional lot size was central to the strategy of the property (ability to sub-divide or build an adu, and addition, or get a zoning variance etc.) then I would most definitely re-run the numbers, and then go back to the seller with what the updated price should be with the adjustment. If the seller wasn't willing to budge then you walk away, and definitely consult with an attorney knowledgable in the specific state as earnest money, and the due dilligence process varies greatly state by state (as well as what is outlined specifically in the aos).

This is also why it's tantamount to really understand what you are signing when you write offers, and know all of your back out points and when you can walk away from deals and how earnest money is handled. If you don't understand this when reading through your aos please ask questions of the real estate agent, a local investor, and/or a local real estate attorney. It will save you so much time and potential headache in the long run.

One thing to keep in mind pretty much every MLS system has a disclosure that the info on it should be double checked and that's why you have DD or inspection periods.. I like South Carolina's ? Charleston MLS it says clearly at the bottom of every listing is sq ft of lot or house Matters then Measure .. cant be any more clear than that.. Also if a lot is suppose to be 10k sq feet and its only 6 sq ft . Most folks upon physical inspection prior to writing a contract could see the error.. or maybe not I guess lots of folks cant visualize. Houses are listed all the time with sq ft discrepancy.. the county will have one thing an appraiser will have another and the agent put another sq ft in the listing.

Bottom line though I suspect this DD money was very small and a lawyer would be WAY over kill cost more than the money at stake.. And good thing it was caught before they closed.. NEXT move on .. Plus most MLS purchase contracts have mandatory mediation in them anyway so those who jump right to get an attorney are not really giving real world advice its just knee jerk reaction like and attorney can fix these small simple squabbles.