This is a contingency just like a home inspection contingency, appraisal contingency, etc. The short sale contingency addendum which most agents use spells out the terms you have negotiated; for example, it may say that earnest money will not be deposited until the lender has approved the deal, that the home inspection and appraisal will be done within a certain timeframe AFTER lender approval. The terms vary depending on the buyer, of course, and these are just examples.
Typically, there is the following (or similar) language: Seller must provide Purchaser with written evidence of lender's approval by (a certain date). If you don't receive evidence of lender approval by that date, you provide notice to the seller you are withdrawing the offer. This is the language you need to reference in your contract in order to answer your question. Hope this helps and good luck,
Without knowing the exact wording in the contract; however, I suggest asking your agents Broker.
I am sure by know you have had this answered and been able to get the home you desire.
Short sales can take time or in some cases seems forever! I can understand your frustrations and wanting to purchase a resale home.
Please look at your contract date of expiration. If you don't renew your offer you can get out of the contract and receive your earnest money deposit. You must have your notice to the seller in writing to withdraw this offer. Are you working with a Real Estate Professional? He or she will guide you through this process. If you are not, I will be happy to help you.
I am a Buyers Specialist and work with The Spears & Associates Real Estate Team at Keller Williams of The Treasure Coast. Please contact me if I can help you find your home in my area.
Michael, if you are out there, what happened?
Best to all, Jim
A short sale is like buying a house from 2 persons, the seller and the bank and both parties of to agree and sign to make the contract ratified, until that happened you are free to walk, your agent should provide a letter sign by you to the bank requesting your withdrawal then a release of obligation and release of deposit follow.
How-ever first talk to your agent, to see if that your best option.
Another way out is, considering that only 30% to 50% of short sale are approved, and the ones that were approved most of them were counter offered until the buyer and the bank came to a final number, In that case if you were to sit and wait and if you receive a counter offer from the bank, then that could be your way out if you don't accept.
You probably found that you could move on and get your earnest money back in a reasonable period of time. I hope you did find the home of your dreams. All the best and Happy New Year to all the agents here.
Robert McGuire ASR
Your Castle Real Estate
1776 S. Jackson St. #412
Denver CO 80210
If you receive any push back at all (and you shouldn't) then simply ask to speak to the Broker in Charge and tell them you want to terminate and demand the return of your earnest money.
The entire process should only take a few days and whomever is holding your earnest money should refund it to you within a few days of having received the written termination notice.
You've learned something many Trulia readers would be wise to consider, Short Sales easily take 2-6 months or more. just to get a response. The response is "NO" more than 50% of the time and it could be because of the price but most often it's because the Seller doesn't qualify for a short sale. There are many motivated Sellers who will be much easier to deal with and if you're renting, "time is money"
I wish you good luck and a healthy, happy and exciting 2012.
I would advise you to review your purchase contract with your agent. The contract, as well as the short sale addendum, contains clauses as to time frames and your rights under the contract. If you are still within your right under the time frames you may be able to cancel the contract without any penalty. I do not know what the short sale addendum contains in your state, but here in California it is pretty pro-buyer.
I would also tell you to try and wait it out. Short sales often command lower prices than traditional sales, and since you have waited a bit already it may be worth your while to stick it out if you still love the home. Speak with your agent about possibilities.
Best of luck,
Rachel LaMar, J.D.
LaMar Real Estate, Inc.
Review your contract and your short sale addendum. This addendum will say how long of a time period you entered when you made your offer and received an executed contract.
Susan Penn, PA, SFR, CDPE
Alot depends upon how you wrote up the contract. More than likely if you are at a point that your ready to move on the contract is expired. With short sale offers there is typically a clause that the bank has to respond within a certain amount of time.
There are definitely alot of people in your shoes and giving up on trying to acquire a short sale, as it seems they rarely close. Statistics say they're getting better but still far from steady.
I wrote a great blog that can help people interested in short sales.
You always have to option to withdraw any purchase contract, but there could be issues you have to deal with and items you might have to pay for later. You should have some idea by your contract how long you have to wait before the contract is out of contract. I would talk with your realtor, if you have one or see an attorney.
Amazing how a link continues over a year.
I understand on May 13, a day after asking your question you further clarified.
Yes, I am sure you can back out based on all the facts in the questions and further clarifications provided by you.
Michael, maybe you can now let us know, how did it go.
Did you successfully by another, how are the values doing and are you happy?
ps. you should never deposit our earnest money unitl you have bank approval on your contract... there should never have been an escrow opened until that bank approval was received... get better councel on the next offer you submit...
Century 21 Flag
One thing to remember: The homeowner doesn't really own the home outright until the mortgage/loan is paid off. Until then the lender/mortgage company owns the home by way of a Deed of Trust or whatever method they use in your State.
I would check your contract and if the dates have past on any of your contingencies you would not be in contract.
Also, if the seller has not signed the P and S you don't even have a contract. Sometimes the bank will ask for all offers without being signed by the seller. Check with your agent. He/she will be able to tell you.
I just had a buyer back out today. We had a clause in the addendum to the contract that allowed us to walk after 45 days if we didn't have Bank approval. Although my buyers loved the property, we moved on to a house down the street.
Best of Luck!!! -Pat
If you've been waiting since February, I definitely see why you want to back out of this!
You should definitely be entitled to your earnest money deposit back as long as the contract was contingent upon a short sale, which it should be!
For Foreclosures (or bank owned) even in multiple offer scenarious, they often require the earnest money deposit upfront but in short sales, the norm is becoming upon acceptance by lender.
good luck on finding your perfect home!
After the first leinholder signs off, the second one has to sign off, then the third and so on. The problem lies in the fact that in a short sale sombody may not get paid because there just isn't enough money to go around. From what I read about your experience and response to the answers so far it appears that there is more here than meets the eye. My advice to you at this point would be to speak to a lawyer to find out exactly what your options are. There are earnest money concerns etc that need to be answered and quite frankly I am not qualified to answer what may become legal questions.
As Vicky pointed out below all contracts differ slightly from state to state and I agree that those of us who do not live in VA really do not have a sound understanding of their contracts.
In saying that, I think it would be wise if you and your agent had a meeting with the Broker of his company and sat down and discussed the situation, that way you will both be on the same page and there will be an oppurtunity for you and the agent to gain some knowledge as to what needs to be done.
You can also speak to your legal advisor to make sure you will not be in breach of your contract.