Is it legal for the seller to raise the sale price if the home is refinanced for a higher value? 7 Answers as of October 07, 2012

Two years ago, I purchased a home. The owner carried the papers. Now I am trying to refinance to get the home out of the sellers name. Escrow has opened and papers were sent to the seller who signed and returned them. The lender wants an appraisal done and the seller now says that if the home ends up a higher value then they are raising the sales price.

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Richard M. Gee, a PC
Richard M. Gee, a PC | Richard M. Gee
It depends on your agreement. However, if the seller sold the house for a fixed price, then generally a reappraisal for a higher amount should not trigger a higher sales price.
Answer Applies to: Colorado
Replied: 10/7/2012
Law Offices of Michael N. Stafford | Michael N. Stafford
If you are in escrow and have a valid unambiguous purchase agreement than the sellers are not able to increase the purchase price. However there are exceptions and I would suggest you consult with an attorney to review your agreements to determine your rights.
Answer Applies to: California
Replied: 10/4/2012
Law Office Of Victor Waid
Law Office Of Victor Waid | Victor Waid
Assuming you have performed all conditions of the contract for purchase, and raising the price by the seller if the appraisal comes in higher is not one of the agreed to terms of the original sales contract if the appraisal required by the lender comes in with a higher value then the contract price, then you would have a right to sue the seller if he breaches the contract by demanding to raise the price. Don't let seller push you on this matter, and hold your ground and seek the services of a litigation attorney if needed.
Answer Applies to: California
Replied: 10/4/2012
Neal M. Rimer, Esquire
Neal M. Rimer, Esquire | Neal M. Rimer
It depends on what the sale contract states. Usually, in these cases, the sales price is fixed and not variable. You need to retain an attorney to review your documentation of the sale to get advice on what to do.
Answer Applies to: California
Replied: 10/4/2012
Danville Law Group | Scott Jordan
Do you have a contract to purchase the property? I would hope you do. The contract will dictate whether the price of the house can be increased to present fair market value. Therefore, it is difficult to answer your question without reviewing the contract. I would say, however, that it would be very unusual to allow the seller to increase the price of the home. If the seller insists on a higher price, you may need to go to court to enforce the contract terms. A strong letter from an attorney first may get the seller back down.
Answer Applies to: California
Replied: 10/2/2012
    Law Offices of Frances Headley | Frances Headley
    No, if your sales contract is for a certain price, that can not now be changed. You should consult a real estate attorney and have all of the paperwork reviewed.
    Answer Applies to: California
    Replied: 10/2/2012
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    That depends on the agreement you had with the seller as to what was payable to pay off the seller carry back. Hopefully you had this in writing. If it was a fixed dollar amount payable, then that is all they can ask for now. If it had an equity share provision, then they may be able to ask for more. If you had nothing in writing or if it did not state what the amount you purchase the house for, then you may have a large problem.
    Answer Applies to: California
    Replied: 10/2/2012
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