ask george & chuck
July 20, 2009

Appraisals, contracts for deed
Answers to real estate questions as appearing
in the Houston Chronicle

Dear George: My mortgage banker said that my appraisal may be less than the loan and that I have two options: renegotiate with the seller or pay the difference to the seller in cash. Someone told me that if the seller refuses to negotiate and I decide not to buy, the seller's real estate agent is required to show this appraisal to all potential buyers. Is this true?

Answer: You may be confusing an appraisal with an inspection report. Written inspection reports that have been performed for the seller within the last four years are required to be listed in the seller's disclosure notice. However, an appraisal report, at least before closing, is between you and the lender. The appraisal does not have to be shared with anyone.

Dear George: I was selling a house under a contract for deed. The grantee defaulted the contract for deed by not making payments. I sent him notice that he had so many days to correct the situation or I was taking possession of the house. He moved. The house was about to be foreclosed on, but a real estate agent helped me get approved for a short-sale program. The house is about to close.

The title company handling the closing needs the grantee to sign a release of the contract for deed, but he will not. Is there any way around this? I mean, he defaulted on the contract, he no longer lives there, why does he have to sign the form? If he doesn't sign it, the house goes back into foreclosure and my credit is ruined.

Answer: This is one of the downsides of using a contract for deed. You can change the title company. Shop for one that may take an affidavit from you that the contract has been terminated. Title companies evaluate risk, and may be willing to insure if they think the risk of the grantee filing suit is low.