Legal Question in Real Estate Law in California

Buying a house

I am in process of purchasing a home in LA, CA. We came up to full asking and our offer was accepted. We got our first appraisal and it came in 50,000 below our offer. On the advice of the listing agent, we ordered another appraiser who came in 35,000 under the first! Again, on recommendation of the listing agent, we we enlisted the advice of her long time appraiser. Once he came to his number, he refused to talk to us. We had been asking for an extension on our loan contingency for days which was set at 17 days in our accepted counter offer. Not only did they not agree, but they served us with 48 hours to perform the day our loan contingency was up. In the meantime, we were just trying to get a high enough appraisal to submit to our lender. Meanwhile we found out they wanted to go with their back-up offer who was willing to put 50% down and a higher purchase price. We were not willing to sign off on our loan contingency today because even though we were scrambling for our loan, it is due to be approved next week b/c of all this and we weren't willing to risk our huge deposit. My question is, if our loan gets approved soon, can we still buy the house even though they had the escrow company send us cancellation papers?


Asked on 4/17/09, 9:51 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Buying a house

I guess you don't have a buyer's agent. The seller seems to be handling this properly, and it seems to me that you are, or soon will be, "out of contract" on this house, and that the seller may quite properly sell to the back-up buyer.

Why would you want to buy a property that two appraisers thought was worth $35,000 or more less than your offer? Are you aware that by statute you can't be obliged to forfeit more than 3% of your agreed price when you default? Further, if you genuinely tried, but failed, to get a loan, the fact that your offer to buy was contingent upon getting the loan should avoid a deposit forfeiture altogether.

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Answered on 4/18/09, 2:01 pm


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