Walked Away From Closing On My New Property

I and the seller met at the attorney's office for our scheduled closing. We sat down with the attorney to review the settlement statement. The attorney went line by line through the statement identifying each line item. Everything looked good until we got to the appraisal line item.

The appraisal line was marked for $50. I stopped the attorney and said I don't think that is correct, I know the appraisal was suppose to cost between $300-$350. Didn't seem like a big deal, appeared to me to be a typo. The attorney recommended I call the lender to verify the fee before we proceeded.

I called the lender. I can't get an explanation. I am told the appraisal was ordered, and 6 days ago the lender called the appraisal regarding the status of the appraisal. The appraiser knew nothing about the appraisal order and the lender reordered the appraisal. Then apparently the lender canceled the appraisal and decided they didn't need it to approve the loan (the details at this point are fuzzy). None of this was communicated to me until I called the lender at closing.

I had been concerned with the appraisal throughout the entire mortgage process since I was purchasing this home FSBO. The lender had offered me a $50 waiver option to forgo the appraisal but I insisted that the lender get the appraisal done. I had followed up with my mortgage consultant via email asking about the status of the appraisal and received vague responses that indicated the appraisal was complete and I would get the details at closing. I never followed up to get confirmation the appraisal was indeed complete.

After getting a vague explanation from the lender that was initially very deflecting of blame or ownership of the issue I recognized I couldn't proceed with closing since this wasn't going to be resolved quickly. Employees of the lender was urging me to proceed with closing and the issue could be resolved afterwards, but I felt like they were trying to cover up a problem on the lender's end. My biggest concern was whether I was in some way breaking the contract and potentially exposing the earnest money I put up as part of the contract.

When I came back to the table and notified the seller I couldn't proceed with closing, the seller was understandingly irate. He tore up a document he was holding and stormed out of the attorney's office without any discussion about if/how we could proceed with closing. At this point I was very concerned about what the legal implications were on my part and what obligations if any the seller had to continue the sale of the property.

After talking with the attorney it seemed the best course of action is to focus on resolving the appraisal issue and then try to proceed again with closing. I hopefully can get a hold of the seller once they have calmed down to discuss trying to reschedule.