Is the Sales Price of a Home always set in Stone?

If you’re currently searching for a home or if you plan to make an offer soon, you might have a few questions on the buying process and how it works. Given that we are currently in a seller’s market, one common concern is the potential for the seller to try to raise the agreed upon sales price of the home after the property is listed and you make an offer that has already been accepted by the seller. These days, this situation isn’t entirely uncommon. However, this is a complex situation with some gray areas depending on each transaction’s circumstances. Orlando Real Estate Attorneys can assist in helping buyers navigate gray areas and take action when necessary.

An Unexpected Increase in Price

Generally, unless previously agreed to under the terms of the contract, a seller may not increase the agreed upon property price once the offer is accepted, so if a seller is attempting to increase the sales price after a contract has already been signed, there needs to be a good reason. Under general principles of contract law, once a residential purchase and sale contract is signed, it is considered a binding legal purchase agreement for a residential real estate closing Orlando. Sometimes, the seller may encounter a situation where they are tempted to increase the price. An example would be another buyer who reached out to the seller and relayed a much better offer. A better offer is not a valid reason for the seller to modify the terms of an executed contract. Additionally, once the purchase and sale contract is signed by both parties and the buyer has paid the deposit money into escrow, absent a default or the failure of a contingency to occur, it is quite difficult to get out of contract. There may be some cases where there is a valid reason; however, not many.

Contingency Clauses

When the contract or purchase agreement is negotiated, a buyer will usually request that various contingencies be included within the proposed contract, which would allow for the buyer to terminate the contract and receive back his or her deposit if the contingency is not met. One of the more popular contingency clauses found in purchase agreements is the financing contingency. A financing contingency within a purchase agreement essentially means that if the buyer cannot procure financing for the purchase of the property, within a specific amount of time, that the buyer would have the option to cancel the contract and to receive a return of his or her deposit. While contingencies are popular for buyers to use, any delays relating to the contingency could result in a seller losing money in the transaction. An example would be a buyer who repeatedly comes back and asks for additional extensions on the financing contingency due to the buyer’s inability to procure financing. In this circumstance, the buyer may ask for more time to obtain the loan financing needed to purchase the property, which is advantageous to the buyer, but if the buyer is taking too long and the real estate market is continuing to rise, a seller may not be so agreeable to giving the extra time. Instead, a seller may decide to come back and ask for a higher purchase price. If this were to happen and the buyer wants the property, the buyer may be on the hook for a higher purchase price.

An Unexpected Decrease in Price

When a home is under contract, the sales price for the purchase of the home is usually agreed upon at the time that the contract is entered into; however, there may be circumstances which could result in a decrease of the previously agreed upon purchase price. An issue that could interfere with the previously agreed upon sale price would be the appraisal results. If an appraisal is conducted on the property and the house appraises for significantly less than the purchase price, a buyer may not be so inclined to pay the full sales price and may want to either elect to terminate the contract or to ask for a reduction in the purchase price. Another situation that could interfere with the previously agreed upon sales price could be if certain structural or maintenance issues were discovered in the inspections that were completed on the property. In this circumstance, a buyer may want to go back and either elect to cancel the transaction or to renegotiate a lower purchase price. A real estate attorney in Orlando FL can support any problems that arise during this process.

What are Your Options? 

If the seller decides to attempt a price hike on the property, even though he or she may have no legitimate reason to do so, there are some actions a buyer can take. Of course, there sometimes are circumstances where a buyer who loves the property enough may decide to agree to an increase in the purchase price and to purchase the property anyway. However, if the buyer is opposed, the buyer may have several options available to explore, such as sending a demand letter, exploring mediation, or ultimately, pursuing litigation. You’ll need the services of an Orlando Florida real estate attorney for this process.

Real Estate Attorneys Protect Buyers

A role of a real estate attorney is to help their client navigate purchases of real property and to also help their client overcome any issues which may arise during the process. You’ll need a real estate attorney if you encounter a situation where the seller decides to raise the property price after signing a contract. They can also help with issues where the buyer and the seller decide to renegotiate and redraft an agreement. Anyone currently requiring an Orlando real estate attorney for a residential real estate closing Orlando should seek the services of Nishad Khan P.L., a top Orlando real estate law firm.