Legal Question in Real Estate Law in Minnesota

Raw land deal

My husband and I signed a purchase agreement to buy raw land up north and inadvertently signed up for 3-yr. balloon loan, do not want that. PA is contingent upon us getting a conventional fixed rate loan up to 30 years term at 8%. The phrase ''up to'' is what is causing a problem because balloon loan must be paid in its entirety in 3 years. We canceled both the purchase agreement and the loan with the bank but the seller has served us a complaint. Now the bank says that if we can't put 25% down and resurrect the loan as was/is, we do not qualify. I need help. We were orignally to close on 8/31 but seller was dragging his feet and didn't have all his necessary paperwork completed. I decided to listen to my intuition and have an attorney review the closing papers since he was dragging his feet. That is when this whole Balloon payment 3 yr. fixed loan came to light. The bank officer led us to believe that if we have 3 years to build on the land. Truth is, total amount is due in 3 years whether or not we build. So we didn't close, got served a complaint and those 2 little words ''up to'' are causing the problem. Any insight at all would be greatly appreciated.


Asked on 9/28/07, 4:52 pm

1 Answer from Attorneys
Steven Vatndal Law Office of Steven J. Vatndal

Re: Raw land deal

Just because you did not get the loan described in the financing contingency does not mean you can cancel the PA for failure of the contingency if, with reasonable effort, you could have gotten the contingency loan. I suspect you could have gotten it at the outset. I agree: the "up to 30 years"language is also a problem.

You need an experienced real estate litigation attorney NOW: the summons must be properly answered within 20 days after service. Once an attorney has made a detailed review of the documents and facts with you, and has answered the complaint; he/she should discuss the least expensive way to settle what at least initially looks like a poor case to take to trial.

Please e-mail me directlywith any further questions. [email protected]

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Answered on 10/01/07, 8:53 am


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