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Recent Cases, Real Estate:  April 11, 2013

A Real Estate Contingency Conflict: See how we kept our client out of court and saved her money


In a recent Chauvel & Glatt victory, a client faced a significant real estate dispute when the buyer of her Hillsborough home conducted an independent appraisal of square footage only weeks before close of escrow and after the purchase contract had been executed.
The buyer’s appraiser stated the house contained less square footage than what was listed in the sales materials. This led to the buyer asking for a reduction in price.
Chauvel & Glatt pointed out the signed agreement included an “as is” clause. This meant the buyer had agreed to purchase the home in its original condition, in spite of any shortcomings as long as no misrepresentation of a material fact existed.
"The buyer is agreeing to purchase the home as is," Ms. Glatt explained. "There are no contingencies on inspections or warranties. Whatever the condition of the home is at the time the contract is signed, that's the way the buyer will get it, as long as there is no misrepresentation by the sellers of a material fact – which there was not.“
In this case the seller relied on a bank-rendered appraisal from a prior refinancing.  Sales materials and the multiple listing service represented “approximate” square footage. All of these factors were of legal importance and further protected our client.
Our client was not legally obligated to lower the price of her home. Had this case gone to court, the likelihood of success was great. However, doing so would have taken an emotional and financial toll on the client.
Since the sale was nearing closure and going to court would have dramatically delayed the process and greatly increased costs for our client, we negotiated a significant reduction to the satisfaction of all parties and helped our client drop the requested reduction by over $80,000.
Have you had similar issues with real estate purchase contracts? Let us know and we can save you time and money.

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real estate law

Yes. The agreement did provide for mediation. However, our client wanted to close and buy another house. So, she wanted to negotiate a deal with the buyer, but wanted some legal leverage to reduce the amount she had to give up. The buyer refused to close and then mediate, so the deal had to be made before close. The square foot difference was of by about 300 feet on a 4000 foot house. We concluded that was material from a breach/disclosure standpoint.

Price Reduction


Wouldn't your sales agreement provide that you have to go to Mediation first? Also, how far off was the square footage? I agree that your client was innocent if relying on a bank appraiser.