Home Buying in 90501>Question Details

Vi, Home Buyer in 90501

Can a seller back out of a short sale agreement after accepting our offer?

Asked by Vi, 90501 Tue Mar 30, 2010

We made an offer on a condo which was accepted by the seller and the bank. All paper work is in order. Now suddenly the seller is coming with excuses and not signing the escrow papers! We have tried to be co-operative with the seller. Can she now change her mind about selling us the property? Thanks.

Help the community by answering this question:


Brokers should have a copy of the short sale addendum in all offers executed before a contract can be submitted to the lender. Although the lender does not request this item for short sale approval, the broker for their protection will require it. Therefore, unless the brokers will "assume" it will be a smooth transaction- they should show to their buyer that all offers can be cancelled at any time. This will help with issues such as the one above. Very likely the seller found another buyer for whatever reason, is going through BK, or is under the impression that they can get their loan modified which cannot occur at the same time as a short sale. Vi, your best bet is to have your agent look into this, you may find that they will come back to you and your offer.
0 votes Thank Flag Link Wed Mar 31, 2010
There is an assumption here that both parties signed the "Short Sale Addendum". That doesn't make it so. Check the original contract that was signed. If there was a Short Sale Addendum, then read it carefully. The first section explains when and how either party can cancel the agreement.
If you are represented by a Realtor, they should be explaining this to you.
0 votes Thank Flag Link Wed Mar 31, 2010
Vi, Yes! A seller has the right to back out from selling their house on a short sale transaction. It says so right in the short sale addendum. Perhaps the seller got cold feet or somehow was able to get their loan modified or somehow they were able to get the money to make their payments. The listing agent should have an answer. I don't know if you are able to speak directly to the seller, but the listing agent should be in communication with their client and have some type of answer for you. It's simple, either they are moving forward with the sale or not! Either way, you deserve an answer. It's frustrating, but rarely happens. I still love doing short sales though, because if done right, they help a buyer get a great deal and help a homeowner avoid a foreclosure on their credit record which stays on for 7 years and is worse than a bankruptcy on their file. Sheyenne Schultz Real Estate Network Group Torrance,Ca
Web Reference: http://shysells.com
0 votes Thank Flag Link Tue Mar 30, 2010
It all depends on what the agreements and paperwork say, what your state laws are, etc.. The provisions in the documents should spell it all out. I strongly suggest you get some legal advice. You didn't mention if you had a buyers broker. If so what do his/her brokerage house recommend. I would be happy to review your paperwork if you wish to send me the package. As one intelligent agent here already mentioned it would be impossible to answer your questions without reviewing your contracts.
0 votes Thank Flag Link Tue Mar 30, 2010
We can't possibly answer this question for you. You'll need either your own real estate agent, or an attorney to review all of the documents that have been signed by you and the seller, and disclosures regarding the short sale itself.

Even if you're working with your own real estate agent, I think meeting with an attorney will be helpful for you.
0 votes Thank Flag Link Tue Mar 30, 2010
Hello Vi, I love answering short sale questions. A seller can back out at any time during a short sell, which is why so many buyers are hesitant to approach short sales. There's a contract known as the "short sale listing addendum" which states that a seller and buyer can back out of the transaction at any time for any circumstances.

Has your side placed money into escrow yet?
0 votes Thank Flag Link Tue Mar 30, 2010
In Short Sales, the contract is between buyer and a bank. If seller decides not to proceed with the short sale, Bank usually requires to bring defaulted payments to current status or proceed with foreclosure. Seller could have come to an agreement on a payment plan with her bank.
0 votes Thank Flag Link Tue Mar 30, 2010
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