Seller Held Financing Contract for Deed I WANT OUT

[Carter]

Hi, I am the purchaser of a home under seller held financing contract for deed. It will not appraise for the contracted price and therefore I will not be able to obtain my financing. Does anyone know if this is my way of getting out of the contract? I'm really hoping so because this house has been nothing but a money pit since the day my husband and I moved into it 3 yrs ago. I don't even care to get any of my money back I have in the house. I simply want out of the contract free and clear. Our contract has no language about appraisal issues nor does it state we have to stay in the house until the market gets better. Currently it is upside down about $70,000 meaning it's worth $70,000 less than what my contract for deed is for and would mean that the bank will not do the loan. Any advice would be great!

[tobee43]

we also have an owner financed house. however, he had the mortgage at 100%, so we are not running across any similar issues as you.

i do know the people up the street also had a contract, but found out the house was on a sink hole, so they simply bailed...left, moved out. the seller doesn't lose since he/she just takes back the property, now the place is rented and also back up for sale. (although, i can't imagine the sink hole situation not being disclosed).

i would speak to atty, but really, if you give them back the house what else do that want especially in light of the fact you cannot get it financed. what are you suppose to do?

it has been mentioned many times on this forum, one must be so careful when entering into a lease option to buy or owner financing situation. they can be tricky and really should be reviewed by your atty. (i know, too little too late). but it's not to late to bail out, however, i still would speak to an atty about the situation since i can't see your contract and do not know if you carry any liability or exactly what the results or repercussions can be for you.

[Carter]

I have called a few attys and they want a $10,000 retainer fee which I don't have. There are some other really shady things in the contract too. The contract is between me (buyer) and a company (seller). I recently found out through the tax assessment office that this company is not the title owner so how can this company sell a house to me that they don't own? I know I really do need an atty but can't afford one.

[tobee43]

I have called a few attys and they want a $10,000 retainer fee which I don't have. There are some other really shady things in the contract too. The contract is between me (buyer) and a company (seller). I recently found out through the tax assessment office that this company is not the title owner so how can this company sell a house to me that they don't own? I know I really do need an atty but can't afford one.

no way!!!!!! that is awful!! how about legal aid????? maybe they can help..or a real estate person can review the contract and see what they think if there is a way out???

if it were me, and it was that bad i would walk i wonder if you can re-open your 13 and add it to it?? hopefully those with 13s will know the answer to that one.

[Carter]

hum well I only have a few more months to go with my chapter 13. Another issue is my 19 yr old son (19 at the time we moved into this house three yrs ago) was put on the contract with my husband and I. This company calling themselves the seller told me that any children living in the house over age 18 had to go on the contract as well. My son is now 23 and has excellent credit. I don't want to walk away and then find this company can come after us for $249,000 which is what the contract is for. It's the stupidist thing I have ever done!!! Now that I only have a few months left in my chapter 13 I actually have a credit score of 650 and can buy a house now I have this stupid contract for deed hanging over my head. I guess maybe I should tell this company that it's not going to appraise so we want out and see what they say. Maybe I am worrying for nothing.

[tobee43]

really carter, if it doesn't appraise then is there something, or anything in the contract saying you must come up with the difference to cover the amount? and, if there is absolutely nothing about the appraisal not working out, then i would think you have a way out of the contract. although, i don't know or exactly know how it reads so that's my concern for you.

[Carter]

There is nothing in the contract about appraisal issues whatsoever. Last year, I did ask the company what would happen if this was an issue when we were ready to get our own financing and they said "we would then come up with a friendly remedy between the parties like maybe the titled owner would agree to holding a second for the difference of what the bank would finance the house for. I went to my contract and there was nothing stating I had to do anything like this. I would NEVER do this! That would mean I get a mortgage for the appraised value and then still pay the seller a second for $70,000 that's dumb!

[tobee43]

unless you LOVE the house?

[Carter]

tobee43, I HATE the house actually...it's a money pit. I can't afford to fix all the things in this home to even get it to pass FHA inspection. I definately want to move out as soon as my BK is done in September. I just want to make sure that they can't come after me but especially my son. Thank you for your advice I greatly appreciate your thoughts. I love this forum. It would ease my mind though if I could get an attorney to tell me that the seller can't come after me if there are appraisal issues since there is no language in the contract about this. I am praying this issue is my saving grace to walk away from this house.

[tobee43]

i wish you the best of luck. i'm still rather puzzled that you can't get atty for less than 10k...i would see about getting a few "free" consults to see what they think your position would be.

again best of luck to you.

[Carter]

Just thought I would update you on my situation. As you know the appraisal came in at $70,000 below the contract price. The "titled owner" said no to the appraisal. The company calling themselves the "seller" said that if I wanted out of the house that this probably would be the best thing for me but said he had to get authorization from the "titled owner". I suggested that we put the house back up for rent or seller held financing on the companies (sellers) website and he told me he would check with the "titled owner" for approval. A week or so went by and the company (seller) stated that the "titled owner" was asking some questions about relisting and I would be updated shortly. He said that the "titled owner's" questions was showing that they were seriously considering this option. Now it has been over 3 weeks since I have heard anything. Looks like they are stalling to continue getting the monthly payment out of me. Which by the way in the rental market I am paying about $500 more per month than the house is worth and even more if I could get my financing for this house. I am paying $1,800 per month for a house that should be costing me $1,200-$1,400!!! I am stuck and don't know what to do other than give my notice to vacate this house and pray they don't sue me for breach of contract.