Should I sue this buyer?

22 Replies

Selling a SFH. Buyer's agent told me today that the buyer can't proceed because of a low appraisal on her own home, which killed a sale. The buyer's agent is talking about an appraisal so low that it's completely unbelievable, and he won't respond when I ask to see the appraisal. I'm thinking of suing the buyer for her deposit. Has anyone else been in this situation?

You will need to sign a release in order for the buyer to get their deposit back. notify the real estate company that you will not sign the release and that you want the deposit and that you are going to sue the RE company and the agent and the broker for misrepresentation and that you want the full deposit back.

Talk is cheap ---- call the Board of Realtors for an opinion - contact a lawyer ---- it seems to me that the contingency to sell their house is bogus.

I don't know all the facts, but you can work on this until you get their attention.  You should also get compatibles on that house.

good luck

The contract allows the buyer to back out of the sale of her house falls through, but I want proof that the buyer is justified in backing out of the deal. The buyer's agent apparently isn't going to give me any proof that the buyer got an unbelievably low appraisal for her house, which supposedly killed her sale. Is suing her for her deposit the only way I can either get proof or get the deposit?

Thank you, Charles Parrish. I posted my reply before I saw yours. As I said, the sale of my house was contingent upon the sale of the buyer's house, but the agent won't give me proof that her sale was killed by the unbelievably low appraisal. Your suggestion that I not only refuse to sign a release but notify the broker and agent about my intention to sue for the deposit is helpful. Thank you.

Thank you, Russell Brazil. Then how is the seller to know that there really was an incredibly low appraisal that killed the buyer's sale of her own home? Surely I can't be expected just to take the buyer's agent word for it?

If they are able to kick out of the contract based on a home sale falling through, the reason their home does not sell is irrelevant. You can easily see if their property is still under contract or not.

If you dont release the deposit....what will you then do if they dont release the contract on your home and then you cant sell it. ( I dont know Florida custom and law, but in MD/DC the contract needs to be released before you can sell the house to someone else)

Thanks, Russell and Jason. In fact, I was also concerned because so far it doesn't appear that the buyer's house has been relisted. Trying to ascertain whether that was the case was complicated by the fact that the buyer's agent apparently scrambled the buyer's address on the contract (intentionally?). I was able to find the buyer's address through the property records, though. Maybe the buyer has to wait until the anticipated (now canceled) closing date passes before relisting her house?

Originally posted by @Jason D. :
@Kay March they dont have to provide the appraisal, they just need to prove that the sale fell through. If, in fact, the sale didn't fall through, then you probably have a case.

I'd argue they don't need to prove anything.  You can't force someone to buy a property from you via lawsuit, not to mention the amount of money you'll ultimately spend on legal fees makes it not worth it.

In our area all buyers know they are unlikely to get the home if they stipulate appraisal as contingency. If they do not have the means to pad the difference they will have problem finding realtors work with them. If buyers want out it is up to sellers what they wants to do-Keep the EMD, accept the next highest buyer etc. Buyer can order another appraisal from another appraiser more familiar with the neighborhood. Try it again.

Lately , California Realtor Association even has a no loan contingency meaning it is buyers problem if loan does not get approved. He can lose the EMD also.

So the question remains what does the contract say about keeping the EMD if the buyer does not perform?

You can sue for breach of contract, can't you, Kon Zel? Even if you don't sue for performance you can sue for damages, can't you?

Sam Shueh, the California market looks like a seller's dream, based on your observations. I am in Florida, and my contract includes a rider which returns the deposit to the buyer if the sale of her home falls through (unless the buyer wants to waive the contingency).

Originally posted by @Russell Brazil :

Sellers do not get copies of the appraisal

 I'm pretty sure I got copies of mine when i did a cash out refi along w/ conventional on a duplex...

 I guess a cashout I'd still be buyer though?

Originally posted by @Kay March :

You can sue for breach of contract, can't you, Kon Zel? Even if you don't sue for performance you can sue for damages, can't you?

They didn't breach your contract, it has a Hubbard clause and their house didn't sell/fell thru. Honestly you can sue all you want, but my thoughts are they will win, you will give it back, and at the end of the day you will be more upset over it all.

Real estate is buying and selling, take emotion out of it.

Originally posted by @Matt K. :
Originally posted by @Russell Brazil:

Sellers do not get copies of the appraisal

 I'm pretty sure I got copies of mine when i did a cash out refi along w/ conventional on a duplex...

 I guess a cashout I'd still be buyer though?

I have only ever seen one appraisal on a sale and it was when I requested it on an appraisal $25k under selling price.

@Kon Zel if the buyer has a contingency based on the sale of their house, they would have to prove their house didn't sell to back out of the contract. @Matt K. Yes, you're the "buyer" in that case so you would get the appraisal. As the seller, I've been notified that the house appraised for the selling price, no but never received the appraisal itself.

It’s simple.....if the buyers house did not actually sell due to Any reason, she has the right to cancel her contract with you.  What part of that do you Not understand?  You’re just shooting yourself in the foot with this.  Anyone will just laugh at at you if you threaten them with any action.  You’re just wasting time if you want to wait until their contract passes their closing date. 

Originally posted by @Jason D. :
@Kon Zel if the buyer has a contingency based on the sale of their house, they would have to prove their house didn't sell to back out of the contract. @Matt K. Yes, you're the "buyer" in that case so you would get the appraisal. As the seller, I've been notified that the house appraised for the selling price, no but never received the appraisal itself.

Again, neither of us are attorneys but I'd be willing to bet that there is no burden of proof here.  A buyer has no duty to show the appraisal.

Let's assume worst case and say that the buyer is lying to you about the appraisal being the reason for sale falling through. Do you still want to try to get that same buyer to closing?  They'll just use another clause to get out of the contract (ie: inspection, financing, etc).  Just move on and look for the next buyer.

This sounds like a contractual issue you should seek legal advice on?

I am not sure what someone on a forum could tell you short of reviewing your contract and providing legal advice, which if they did and they are not an attorney they could expose themselves to practicing law without a license, lol.

I did finally get a copy of the contract cancellation between my buyer and her buyer, so that, at least, was proof of the cancellation.