Legal Question in Real Estate Law in Virginia
Wife and I are in Virginia and signed contract to purchase home, signed off on inspection addendum, and then were denied both mortgage insurance and eventually a mortgage as there were problems with value of home (bank stated property was overvalued despite appraisal coming in at agreed purchase price). We told sellers we no longer wanted to purchase the home as there are problems with value (house had 3 dfft appraisals all coming in with very different numbers). Seller attorney sent letter stating we are in default of contract and must attempt to obtain another loan. Contract states "purchaser must make diligent effort to obtain loan from a lender" (not lenderS). If we attempted to obtain loan and were denied, does the seller have recourse against us?
Earnest discussion with seller's agent, who stated we cannot cancel contract just because we do not want to purchase home which bank states is valued incorrectly. We reminded them that we were denied loan from bank. They are stating that because my wife knows the loan officer professionally (she is a real estate agent also), we must attempt another loan with difft lender. Seller�s lawyer is further stating that because she spoke directly to the bank�s appraiser AFTER he had submitted value to the underwriters, she is in collusion with the appraiser.
2 Answers from Attorneys
What that agent is doing is the "unauthorized practice of law" and is a misdemeanor in VA. You should contact an attorney, who in a brief consultation could inform you of your rights and set your mind at ease.
Regards.
Obviously, these folks are desperate to sell what may be a problematic property.
You have, arguably(I believe) met the requirement under the contract for due diligence, but if they have no replacement buyer(s) on the horizon, they may attempt to sue for specific performance or some other remedy at law (damages) if there is no settlement of the matter.
(The attorney should be told that you regard his allegation regarding collusion as
absurd as well as insulting.)
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