What is your agent saying? Are you having the short sale process explained to you as you go along? What does your agent think of the current value? Is it correct or can the listing agent dispute the updated BPO?
Besides our sales contracts we also include a short sale addendum. There are time limits for approval and if those contingencies are not met the contract may be null and void. Please ask your attorney on what your options are.
Unfortunately for buyers, our local markets are experiencing a lack of inventory which is causing an increase in prices. Updated documents are always being requested throughout the short sale process, not only from the seller but the buyers too. If the approval is taking a long time the bank will request an updated BPO (Broker Price Opinion) which allows them to get a current value. The bank is making sure they are getting as much as possible for their asset. The seller does not have to accept the bank's short sale offer and can choose to let the property go to foreclosure.
Laura Karambelas, Broker Associate
Baird & Warner Downers Grove
If the Bank owns the property, then they got it through a Foreclosure; and all LIENS should have been satisfied by the Foreclosure!
And, if you have an "ACCEPTED" offer, then you had a CONTRACT at that point.
I'm not sure how those things are done in Illinois, but, when you gave them more money, at that point, you probably made the contract null-and-void.
Your RECOURSE is to talk to a local Real Estate Attorney.
There was a time when the 2nd lien holder would take perhaps 10% of the amount of the lien and be happy, that is no longer the case. I ran into one somewhat recently that for the 2nd lien they wanted probably close to 90% of the loan amount, and/or to have the sellers agree to make monthly installments towards the 2nd lien after the home would sell. Basically giving up nothing as a junior lien on the property.
â€œItâ€™s very much like hostage situations,â€ Sam Khater, CoreLogicâ€™s senior economist, said of second-lien holders. â€œItâ€™s like an all-or-nothing situation in terms of payoff, and theyâ€™re very unwilling to bargain.â€ You probably signed something that read's like this:
1. The sale of the property may result in a â€œShort Saleâ€. A Short Sale is a situation where the Sellerâ€™s net proceeds after payment of all applicable closing costs and other charges payable by Seller from the sale of the property are insufficient to pay the Sellerâ€™s outstanding mortgage loan(s) and/or other secured lien balances in full at closing unless the lien holder(s) provide(s) a full release(s) by accepting payment that is less than the amount(s) actually owed to the lien holder(s). Therefore, this contract is contingent upon lien holder(s)â€™ approval of the amount required to pay off in full the Sellerâ€™s outstanding mortgage loan/lien balance(s). If the lien holder(s) does not approve this contract on or before 10 calendar days prior to closing, then this contract shall be terminated automatically and both parties shall sign a Termination Notice releasing the Earnest Money to the Buyer.
2. Until such time as Buyer or Selling Broker has actual knowledge of lien holder(s) approval of this contract or waiver by Seller of this contingency, Buyer shall have the right to withdraw from this contract by giving Seller daysâ€™ written notice of Buyerâ€™s intent to withdraw. At any time prior to Buyerâ€™s withdrawal, the only way a Seller may waive this contingency is by notifying the Buyer in writing that Seller is now able to perform (i.e. pay-off in full all existing secured liens) without lien holder(s) approval. Upon the waiver of the contingency by Seller, the contract, and all Addenda thereto, shall be considered in full force and effect. If Seller fails to waive the contingency, Buyer shall exercise the right to withdraw by providing Seller with a signed Termination Notice providing that the Earnest Money shall be returned to Buyer, and the Seller shall immediately sign such Notice.
3. The real estate agent(s) shall not be liable in any way for any damages incurred for either the Buyer or the Seller participating in this transaction. Buyer and Seller agree to hold harmless from liability any real estate broker or agent participating in this transaction. Note: Involvement in a Short Sale may not preclude foreclosure proceedings against Seller at any time before the scheduled closing. A lien holder is not bound to accept less than the amount owed to it by Seller. If a lien holder refuses to accept less than the full amount, the Buyer has no recourse against lien holder or Seller unless specified otherwise. From time to time the contract may have time frames adjusted in writing, but must be signed by both parties. 4. In the event of a conflict between this addendum and the contract, this addendum shall control. In order for you to obtain title both lien holders have to be willing to put in writing that the loan payoffs satisify the liens (even though they are short) If both lien holder don't agree then there is very little you can do.