We have a 12 month exclusive option...can the seller back out?

We are in a lease purchase situation. We paid a broker a flat fee to draft the contracts, but they are no longer involved in the transaction. We have lived in the property for six months and exercised our option on April 1st. We are clear to close pending appraisal. It came back 15k below contract price. EXCEPT, we anticipated this and our 12 month exclusive option states the sale price is "x number OR appraised value whichever is lower." The seller is now asking us to either wait until later in the option period to see if the value increases (but so might interest rates, or we might lose our financing approval, self employed) or they want us to pay out of pocket for the amount the appraisal was short. Aren't they legally bound to the option contract they signed? They already agreed to sell for appraised value if lower, right? We have been dealing with them directly, but I am inclined to hand this over to my attorney.

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We have a 12 month exclusive option...can the seller back out?

By Rebecca Steinmetz   
Posted on Apr 13, 2019 in Topic: Home Buying
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We are in a lease purchase situation. We paid a broker a flat fee to draft the contracts, but they are no longer involved in the transaction. We have lived in the property for six months and exercised our option on April 1st. We are clear to close pending appraisal. It came back 15k below contract price. EXCEPT, we anticipated this and our 12 month exclusive option states the sale price is "x number OR appraised value whichever is lower." The seller is now asking us to either wait until later in the option period to see if the value increases (but so might interest rates, or we might lose our financing approval, self employed) or they want us to pay out of pocket for the amount the appraisal was short. Aren't they legally bound to the option contract they signed? They already agreed to sell for appraised value if lower, right? We have been dealing with them directly, but I am inclined to hand this over to my attorney.
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Asked by: Consumer
Posted: 1 month ago
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Gold
Yvonne Chauvin
about 1 month ago
Good morning Rebecca,

Please contact a real estate attorney for assistance. We cannot provide legal advice and are not party to this transaction.
Never, ever enter into lease to purchase without an attorney to begin with. There are too many moving parts in such transactions and brokers/real estate agents don't have enough promulgated forms to be able to broker such transactions.
Call an attorney. Most will be able to offer free consultation. If not, small fee that you pay them may just save you thousands of dollars in the long run.
Thank you,

Yvonne Chauvin- REALTOR
Better Homes and Gardens Gary Greene Real Estate


about 1 month ago
Gold
Matthew Wigtil
about 1 month ago
Yes, I think you are on track with handing it over to your attorney! As Realtors, we cannot offer legal advice. I hope things work out well for you in a timely fashion!


about 1 month ago
Diamond
Veronica Mullenix
about 1 month ago
You are correct in your decision to have an attorney review your contracts!! The Lease Contract and the Purchase Contract might contain conflicts that only an attorney can remedy.The terms related to the purchase are contained in the Purchase Contract. AND, the Lease too has its terms. My hope is that an attorney can draft an Amendment to either or both contracts to give you and the seller relief from this conflict between the two Contracts. You need assurance from an attorney that your purchase contract is ironclad.


about 1 month ago
Gold
Dori Lacamu
about 1 month ago
Hi Rebecca,

You should definitely contact a lawyer. As a REALTOR I can not give legal advise. If you need a list of real estate attorneys please don't hesitate to contact me.

Dori Lacamu | Broker Associate
KELLER WILLIAMS METROPOLITAN
5050 Westheimer, Suite 200 | Houston, TX 77056
281.788.0495 (c) | DoriLacamu@kw.com


about 1 month ago
Platinum
Mark McNitt
about 3 weeks ago
Hello Rebecca,

This is a perfect example of why Realtors do NOT deal with "Lease to Purchase". There really is no such transaction. It should be a called a "Delayed Sale" or something like that. Not using standard forms that are created by Attorneys, too many "what ifs", etc. Also, Sellers/Landlords can scam renters/future buyers without them knowing it.

Yes, reach out to an attorney. For those thinking about doing this, just offer a normal contract with a price set, closing date set and use the temp buyers lease form and now your leasing the home prior to closing. These forms already have the "what ifs" covered.

Mark McNitt
MarkKnowsHouston.com
832-567-4357
Bernstein Realty


about 3 weeks ago
Disclaimer: Answers provided are just opinions and should not be accepted as advice.
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