Home Buying in Indianapolis>Question Details

waynethoms, Home Buyer in Atlanta, GA

Can I cancel a contract extension submitted by me(the buyer)?

Asked by waynethoms, Atlanta, GA Sat Oct 13, 2012

Home purchase was, in the beginning, a standard house purchase from seller to buyer through a listing service,assisted by agents,the sellers and mine.Three weeks before the agreed closing date,the seller pulled a short sale request which stalled the sale,asking for extensions. I've grown tired of the game here but at the suggestion of my agent agreed to a last minute extension by my side.Because of the sellers lender not returning the short sale approval letter in time before the closing date,the closing was cancelled as i drove to the signing.Can I cancel?

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Answers

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Thank you, for your question:

The answer to your question will almost certainly be found in the answer to this question: "WHAT DOES THE CONTRACT SAY?"

You need to review, IN EXCRUCIATINGLY GREAT DETAIL, the entire written agreement, including, but not limited to the initial contract, ALL of the written addenda and extensions, ALL OF THE signatures, initials, dates (and times, where appropriate), time frames and deadlines. There are ABSOLUTELY NO EXCEPTIONS to this!!!!

EVERYTHING that is in writing and is related to this transaction is extremely important and could affect the outcome of your case!!!

There is an enormous amount of information in all of the written documents and in all of the written agreements between you and the seller, that you need to know, and that we need to know before we can even begin to give you a decent answer to your question.

Whether or not you can cancel this transaction without severe negative legal consequences to yourself, depends on ALL of the information that is contained within the entire written agreement, including all of the addenda and extensions.

Every word of your contract, and every word of every written addendum and extension is extremely important. Without all of that in front of us, we can only guess at what might be in your contract, addenda and extensions.

Depending on the wording of your contract, addenda and extensions, what was signed, by whom and when, the outcome of your transaction AND THE ANSWER(S) to your question will be very different.

At this point, you REALLY NEED TO HAVE THIS ENTIRE TRANSACTION REVIEWED BY AN ATTORNEY!!!!!!! Just based on the wording in your question it appears that the Real Estate Agent who is representing your interests as the buyer has blown it BIG TIME!!!!!, and the Real Estate Agent who is representing the interests of the seller has also blown it BIG TIME!!!!!

At this point you have some very serious legal issues and only an Attorney can help you resolve those legal issues. You and the seller are LONG BEYOND the stage where mere Real Estate Agents can resolve this issue for you.

I see that you are located in Atlanta Georgia, but this question is about home buying in Indianapolis, is that correct?

I recommend that you interview several Real Estate Attorneys in the jurisdiction where the property is located. If the property is located in Atlanta Georgia, then I recommend that you interview Attorneys who are practicing law in Atlanta Georgia. If the property is located in Indianapolis, then I recommend that you interview Attorneys who are practicing law in Indianapolis.

Show the Attorneys all of the documents that are related to this transaction. Hire the Attorney that you think is best for your case.

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
State of California DRE#00901872
.
0 votes Thank Flag Link Sun Dec 2, 2012
I am not so sure you can cancel and get your earnest money back. Best to get counsel from your agent and/or a real estate attorney. As a practical matter, if you start the whole house hunting procedure over again, looking, making an offer on another house, paying for inspections, appraisal, financing, etc, you might be better off waiting another few days or week to get short sale approval letter from the bank, assuming you still want the home. It was kind of unsettling to learn the sellers wanted a short sale request three weeks into the process, but it's a sign of the times. The fact that the bank didn't send the short sale approval letter in time for the scheduled closing may not be the fault of the seller. I just recently closed a regular transaction, no short sale, after 5 rescheduling attempts. It happens. Good luck and best wishes.
0 votes Thank Flag Link Sat Oct 13, 2012
Wayne,

Your sellers may not have known they were short of funds until they got
their mortgage payoff. Whatever the case, the wording in the Extension
you signed is important. In it, did you promise to wait until the short sale
approval was given, or for a specific amount of time?

At any rate, you state you're tired of waiting ... and your sellers' bank must
agree to the short sale before closing. So, ask your agent to prepare a
Mutual Release that will excuse you from the terms of your contract and
ask for the return of your earnest money.

If the sellers balk at signing, ask advice of a real estate Attorney.

I've sold quite a few short sales, some have progressed quickly because
everything was ready, some have dragged on for months.

And good luck,
0 votes Thank Flag Link Sat Oct 13, 2012
It is confusing as to what you have and where the offer is as far as a contract. I disagree with Peter below, you do or did have a contract. It sounds like there was not enough proceeds to pay off the loan and so the seller added the short sale contingency at the last minute. Shame on them for not knowing that sooner. Short sales have a contingency added to them that the bank must agree to the sale. You still have a contract with the seller, it just now has a huge contingency added to it. If you signed that addition, then you made the contract you had contingent on now getting the bank to agree to it. The bank may never agree, they might not be willing to accept a loss and you may never hear back form them. Many sellers do not understand the short sale process and some agents do not either and they think they can just do it because they feel like they want to, banks look at it differently. Bottom line, seek legal advice or have your agent send the sellers a termination request and ask fro any deposits back. Short sales are a royal pain in the a$$.
0 votes Thank Flag Link Sat Oct 13, 2012
Without a short sale approval, you have no contract, assuming you agreed to buy the home "subject to short sale approval". Also, you probably agreed to extend the closing date in writing to a specific date - which has now passed presumably.

Peter Knight
RE/MAX Ability Plus
Fishers, IN
0 votes Thank Flag Link Sat Oct 13, 2012
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