Legal Question in Real Estate Law in Maryland

We are in a living nightmare. We signed a contract to build a home using an FHA loan. We waived our financing contigency because we had the loan, however the appraisal just came back 60k less than the sales price on the contract. We are 2 weeks away from closing and we are wondering what our options are. Our FHA loan has obviously been denied and we don't have the money to make up the difference (nor do we want to). We would like to negotiate with the builder for a lower price, but we want to know if we are able to get our $50,000 deposit back before we begin negotiations so we know how strong our case is. Do you think given the fact that it was an FHA loan, we can get our money back even though we signed the financing contigency waiver?


Asked on 6/13/11, 10:38 am

1 Answer from Attorneys
Robert Sher Wagshal and Sher

Typically contracts that are based on FHA loans state that if the appraisal comes in below the sales price, the seller can reduce the price to the appraisal or the buyer can walk. You should immediately contact an experienced real estate attorney and let him/her review your contract and loan papers. It may well be that it's illegal for builders to require waiver of this provision.

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Answered on 6/13/11, 10:53 am


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