Unfortunately there are few, if any, guarantees with these short sales. And the banks are expecting buyers to go all the way to contract before offers are accepted. Your experience is all too common these days. Hopefully the risks were explained to you when you were filling out your purchase paperwork. You can offer to raise your bid to match or exceed the new figure, but again there's no guarantee your new offer will be accepted. I would try it anyway if you really want this house.

Good luck.
Stephanie Patton
Century 21 Alliance Realty Group
845-297-4700

The agent should have apprised you of the issues and procedures listed below, and also you should have been given the opportunity to counter offer, in summary the following are the issues with short sales.

As far as short sales unlike foreclosures, Banks require a fully executed contract without any contingencies other then a mortgage contingency, ( you need a very strong letter of credit or a conditional commitment from your bank, or cash) prior to review by the sellers bank's loss mitigation or settlment group, if there is a second lender involved it can take months to clear.

The sellers bank sends out an appraiser, if the value comes in at your offered price you are bound by the contract.

Inspections after the fact are not accepted by the bank, the only other way out is if an environmental issue or Certificate of Occupency issue is discovered that blocks title transfer and therefore bank funding by your lender. It is the sellers obligation to clear these, however if money is a problem. who remediates these issues? Title can not be transfered etc. You have spent time and money and now there are issues which will block your funding and "kill" the deal. Remember the bank does not have posession of the house, more then likely the seller will not be willing or able to remediate these issues.in part that is why a large number of short sales wind up forclosed on and are auctioned off.

So these issues should be investigated by your agent prior to any action on your part.

As far as waving an inspection unless you are a cash buyer with deep pockets, a minimium of , water (if well) septic (if not sewer) wood destroying insects and clear title are required by your bank, and if there is a buried oil tank, that is yet another test you would want to perform. My advice to you is the next short sale you wish to proceed with, investigate the above title issues first, get an appraisal immediately, before you spend thousands of dollars on tests and attorneys to make certain that you even have a chance that the bank will accept your offer and yes if its a great deal you have to move quickly.

If you are a cash buyer none of the above will affect you taking posession, however you are now stuck with remediation and the prospect of ownerhip of a property which may not be marketable, Realtors
and Attorneys would advise you that it is reckless to proceed in that fashion.

GOOD LUCK

ok....I leave it alone.
Just hate when people have to go through things like this.

Have a great day tomorrow.
Micki

Thanks for your imput. I learned that an "accepted offer" in NY simply means that the seller said he accepted our offer, not necessarily that our offer was signed by them. Wish I had known that

Tt,
Ok...Hear me out on this one...Did your agent submit the offer to the seller or did the listing agent? Did the seller -NOT the bank ACCEPT your offer by signing the offer you submitted? If your agent or the listing agent informed you that you had an ACCPETED offer from the seller (signed, dated and a copy given to your agent) then they are obligated to submit YOUR offer to the bank and should have placed the property in back up status which would have made any other offers 2nd to yours regardless of the price. Although I am not authorized to give legal advice, I would think that at a very minimum they would re-imburse you based off of the fact that they took the house from under you after having accpeted your offer. Please check with your agent as someone needs to reimburse you. I am so sorry this happened to you.

Micki

I spoke with my agent last night night for some clarification. The seller accepted our offer and it was my agent who said the next step was to get the house inspected before going to contract in case there were issues that had to be negotiated. The seller's bank did not require it as I had thought. Apparently a "accepted offer" means nothing. I assumed (big mistake) that that meant something like our signed offer was signed on the other end. Someone else was able to submit a higher offer and the seller took it over ours. Had I known that there was nothing signed I would have foregone the inspection to speed things up. My bank would have required one but that could have been done after a contract was done. The house was only a few years old and my father was an engineer who looked it over so I knew there were no outstanding issues with the house. The listing agent said she would tell the seller that we wanted to be paid back for our inspection but said that was unlikely as they are not legally obligated to. I live in NY so the process must be different here.

Yes, it is still odd as I have NEVER asked or had a bank ask for an inspection before I could sumit a short sale offer....but it could be their guidelines. However, I am a little confused. Did you have a SIGNED accepted offer by the seller and then you did the home inspection? Or did the seller's agent say you need to get an inspection BEFORE they would present the offers to the seller? Something just doesn't seem right.
I guess my advice is to check your offer and if it was signed by the seller as accepted and you and your agent acknowledged it, then your offer should have been the one submitted. What does your agent say?

Micki

It was the sellers bank that required that we have an inspection report submitted with our offer to them. Odd right?

Tt, this is too strange. While things in NY may be different than out here, I have NEVER had a buyer get an inspection on a short sale until it was an accepted-by the bank- offer. If your contract is signed by the seller as accepted then I logically would think that YOU are the buyer and YOUR offer should have been submitted to the bank as you were told it would be after the inspection. I think you need to speak to your agent and have him/her go to bat for you on this one as something seems very wrong in my opinion.
Best of luck to you!
Micki

She told us that the bank who was involved in the short sale required that we have an inspection done and submitted with our offer. I thought that was an odd requirement as we were not getting the mortgage through them. The listing agent was to "formally" submit the inspection report and offer.

Well it looks like you are out as you did not submit your offer prior to this new offer. Banks will not take deals contingent upon home inspections and will sell as is so that is why you did the inspection first as you could not use that as a contingency to your agreement if you did put in an offer.

Unless the deal falls through, I think you may have lost out on the home. But once again, $460 is a small price to pay if you went the other route and lost thousands if the house had some severe problems and you could not walk without losing your deposit money.



Sean Dawes
Long and Foster Real Estate Inc.

What did your agent tell you?