I'll say it again - get the Broker involved. NOTHING can be paid to the seller. EVERYTHING must be included on the HUD-1 and EVERYTHING must be approved by the short sale lender(s). If you are paying for any of the seller's costs, it MUST be included on the HUD-1.
It sounds like you have multiple Addenda doing multiple things and unless someone clarifies all of these Addenda and "understandings" this transacton could be a mess!
Best of luck,
Broker / REALTOR
I would just like to echo the comments you've received so far....and add that your agent should contact the listing agent's broker and have a conversation. If the current owner is asking for money, they are probably violating the terms of the short sale. Most lenders require the buyer and seller to sign a form which states that the seller is getting no money out of the transaction. If this is true and you do give the current owner money, you too can be committing fraud. Protect yourself and get some legal advice....I am not a lawyer and so I cannot advise you of your legal rights and responsibilities...but I would like to alert you to this potential problem.
Time to get some brokers involved, and perhaps the Board of Realtors....if you have an extension from the short sale lenders, and you are ready to close....something's odd.
We are not attorneys and cannot give legal advice.
Unless something is in writing, it does not exist. I've done MANY short sales and have had to get extensions on many approvals. I can't determine from this posting who's doing what to whom. You should have a copy of the Approval Letters from the sellers current lenders (short sale lenders). In those approvals it should be very clear exactly what the price is and the amount they are due on a certain date. Additionally, some lenders levy a "per diem" charge if the closing date passes and needs to be extended.
On those letters will be the contact info for the closing negotiator. If the Seller's Agent / Broker is not communicating, have your Escrow Officer contact the closing negotiator and let them know you have signed your docs and you're ready to record / close. Typically, that will get things moving again.
As others have said, the current owner / seller CANNOT receive any proceeds in a short sale. And, NOTHING should be paid to anyone outside of escrow - other than your appraisal which will show on the HUD-1.
Talk to your agent/broker and they should be able to work through this for you.
Best of luck,
Broker / REALTOR
I would get your agent's broker involved asap - and the broker of the listing agent if at all possible.
It's important to remember the statute of frauds in real estate - that agreements must be in writing in order to be enforceable. If the bank has not pulled their short sale approval, and the seller has acted in such a way as to continue to proceed with the escrow, and now suddenly is using extortion techniques - that should be explored with a real estate attorney. Get legal advice - and quick!
Good luck to you!
This is a short sale transaction and I have my own broker.
Here is more detailed scenario: Short sale approval indicated funds must be received by Lender on 3/30/10 and later extended to 5/25/10. However, the escrow closing date was not extended. But the addendum that the Seller signed on 4/21/10 was to acknowledge that since closing date had passed he is asking for credit plus to add additional buyers. Anyway, after that Seller already wanted to cancel only for reason that escrow date is not met. We did negotiations and verbally, the Seller was once again in agreement that the deal is on. We did receive a demand letter to close in 3 days and of course again my bank only was able to order docs on the 3rd day. The day we were to sign, the Seller sent another Cancellation Notice indicating breach of agreement.
During this process the Listing Agent has been very difficult and unconventional. He would give verbal agreement today and then next day take it back. This transaction also has been dragged on because of decisions that Listing Agent were making.
Is this an REO Property? If so, is the seller / bank asking for a per diem amount as desribed in their bank addendum? If not an REO, has the seller given you a Notice to Perform?, or a Demand to Close Escrow? Is the only Addendum that has been signed the one asking for a credit and nothing else.
As Jason said below, did you sign an "Extension of Time Addendum" to delay closing escrow"?
Where is your agent? ARe you using the Listing Agent as your agent (double-end).
These are all very important questions as I think there is much more to this story - or - someone is not doing everything correctly.
Please get back to us with more info - and most importantly, you need to discuss with your agent who I hope is NOT the Listng Agent.
Best of luck,
Broker / REALTOR
You said the contract had a close date of 3/30/10, but that did not occur due to, I'm assuming, some underwriting issues from your lender. Did you and the seller agree to an extension (amendment to the contract) to push the date of closing due to the fact that it was not going to close on the date that both parties (you and seller) agreed upon? If so, what is that new date? If no, or if that new date has passed, and you still have not closed, it appears that you are technically out of contract and if that is the case, more than likely the seller can walk away/cancel, because essentially there is no more contract. All terms were not filled (i.e., you being approved for a loan and closing on the home.) Of course, I do not know all of the facts of this particular situation, but from what you have provided, this is the best I could come up with. You may want to discuss with your Realtor, if you have one representing you, if there is a need for you to contact a real estate attorney to further discuss your particular situation. I wish you luck.