mike mcghie, Real Estate Pro in lake worth, FL

Can I get my earnest deposit back with not problems if I no longer desire to wait on the bank's answer?

Asked by mike mcghie, lake worth, FL Mon Jan 4, 2010

I put in an offer for a house that's in short sale. It's been 3 weeks and I haven't heard from the bank even though I matched the asking price. I feel the wait is excessive, and I want to walk away.

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I have the same issue with a client currently and you really have to ask your self if the house is really what you want. I'm not here defending banks, but they are short staffed when it comes to short sales and backing out just because you think their taking too long could cost you a great deal on a great house. Have you tried having your agent call the seller's agent to get an update on the progress? You might be closer to an answer than you think.
0 votes Thank Flag Link Tue Jan 5, 2010
Hi Lisette,

Yes you can get your earnest deposit back. Just rescind your offer. There is no contract in place since they didn't accept.

The others are correct in that Short Sales are NOT "Short". One can easily wait 1-3 months or more before you get any reply at all. It is what it is. There may also be more than one lender involved and they may not have made you aware of that. If there is more than one lender then things take forever.

Good luck!
0 votes Thank Flag Link Tue Jan 5, 2010

Short Sales are anything but as I am sure you have come to realize. Go over your contract and that's something you should be asking of your realtor. It is not unusual for banks to take a month or two to give you an answer.
I do agree with you that the wait is excessive. Wish it could be done in 48 hours wouldn't that be good.

Good luck and hope you find the home you want.

Genevieve Ramachandran
0 votes Thank Flag Link Tue Jan 5, 2010
Lisette 3 weeks is actually very short when it comes to short sales, the average short sale takes 3 months on average with most 3-6 months from the time an offer is placed. One of the facts that often gets lost, is teh bank does not set the asking price on a short sale, it is set by the listing agent, often times it is set very low to attract the most buyers when in fact it should not be less than 80% of what the owner owes. The most importnat thing when making an offer on a short sale is to have a buyer broker representing you, looking out for you and instructing you how the process really works. If yo9u do not have one, then what you should know is there are many steps in a short sale, the first is for the bank to even approve the seller financially to complete a short sales, next is the listing agent setting a realistic price that will attract buyers but be within the 80% the bank will accept, sometimes teh area has dropped more than 20% and the current market value is so low, a short sale may not be possible. Once an offer is submitted the bank will have at least 2 bpo's or appraisals and guage what they will receive from teh short sale versuses if they foreclose. There is alot of paperwork , time, sweat, anguish and daily phone calls to the bank by the listing agent if this is going to work. you will need to ask the listing agent straight up,l where exactly they are in the short sale process. You can base it on these questions, has the bank assigned a negotiator, has the the appraissals or bpos been completed, has teh entire short sale package been received from the bank and is the package with the negotiator for a decision. In the best world once teh negotiator received the package. it is usually 30 days for a decision. Now if your purchase agreement states it is contingent upon short sale approval, the approval has not come, then you can withdraw your offer. In most short sales, the deposit should not be cashed until the short sale is accepted. good luck working things out.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Jan 5, 2010

The answer is yes. Purchasing a short sale can be a trying experience and you must be patient and hope that those negotiating with the bank for their approval are communicating with you. If after three weeks you are already getting anxious a short sale transaction is probably not for you; unless you find one where the third party approval process has already started. Short sales can drag on, and on, and on; I just closed one last week that was about 6 months in the approval process mainly due to two lenders being involved than anything else.

Your offer is contingent on third party approval and you are free to withdraw your offer at any time before that approval is granted. Be sure to have a Release and Cancellation form executed and ensure that any earnest money deposit money you have deposited is returned to you.

If you would like any additional nformation on short sales, or I can help you in any way with the search for the perfect home (and negotiating the right price) just let me know. I am easily reached at 561 308-0175 or via e-mail at tom@tompriester.com. After one call you will know what "Results Driven Real Estate" is all about!

At Your Service,

Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
Web Reference: http://www.tompriester.com
0 votes Thank Flag Link Tue Jan 5, 2010
Hi Lisette,

You need to ask that question of your Realtor. A lot will depend on the way the contract is written. Is this a bank owned property or a short sale?

If you are dealing with a short sale, it is not unusual to wait 3 - 4 months for the bank to give an answer. If it's a short sale you should also have signed a Short Sale Addendum to go with the purchase offer.

Good luck with your situation.

Nadine Mauro
Realty Hub, Inc.
0 votes Thank Flag Link Mon Jan 4, 2010
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