Q: Hello, I’m under contract for a home and want to back out due to it under appraising
The realtor has informed me that I cannot back out of the contract or I will lose my security deposit. The original appraisal was disputed. The seller is pushing to pay for another appraisal to be done. The realtor has asked the lender to get approval for another appraisal, but at this point I just want out.
A: If you have a financing contingency, and your lender refuses to approve the loan based on the appraisal, then you may have a basis to cancel, but it depends on the language of the financing contingency and whether the lender will fund the mortgage for the purchase price under a different appraisal, or if you can still get alternative financing on the same terms set forth in your financing contingency if the specific lender is not specified. You will need to take your contract and other documents to a lawyer to review.
If you have the standard MAR contract, the financing and appraisal addenda will describe a specific process to deal with this common situation. I say this as both a lawyer and Maryland licensed broker. Some agents will push for you to act outside the written process in order to preserve their right to collect commission. Your question can't be answered, here, because we do not know what addenda have been included in your contract with the seller.
Also, there is a mediation process to resolve a dispute about the security deposit.
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