Home Buying in Belleville>Question Details

missconnieh, Home Buyer in Belleville, IL

How binding is an accepted offer? Don't they need to sell it to us for that price now?

Asked by missconnieh, Belleville, IL Thu Feb 28, 2013

We offered asking price on a short sale and after a long time, the bank accepted our offer. Then they came back and said they needed more money because of a second lein. We reluctantly increased our offer, but then they said it had been so long they needed to go back and assess the value--and now they want $35,000 more for the property than what they originally accepted. We've been in this process for at least 1 year. Do we have any legal recourse?

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Sounds like the bank is bank is counter offering your offer.You have waited a long time already and there are no guarantees you won't wait some more. On short sales you pay with your patience but should hope to realize a discount for it. You can of course refuse their counter and wait it out. It is the banks job to discover and negotiate second liens. There is an oversupply of homes for sale in Belleville. Move on. Your earnest money should have not been risked before the bank was done with all and have an accepted and executed contract.
0 votes Thank Flag Link Sun Mar 3, 2013
As far as legal recourse you need to ask your attorney about that as agents we are not able to give legal advice.

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.

Good luck!

Laura Karambelas, Broker Associate
Baird & Warner Downers Grove
0 votes Thank Flag Link Fri Mar 1, 2013
You waited a long time to start asking questions:
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.
0 votes Thank Flag Link Thu Feb 28, 2013
The property is in CA.
Flag Thu Feb 28, 2013
Did the bank actually accept your offer or the seller with a contingency of his banks short sale approval? I would think that it was the seller whom accepted your original offer. The seller just wants to accept anything to get out from under the mortgage and debt. The bank doesn't full accept the offer until all of the banks contingencies for the short sale are met and every piece of paperwork is fully executed, I's dotted, t's crossed, and they can feel confindent that they have met all federal guidelines and their file is meets every regulation. With that said, they are really only dealing with their "first mortgage", if there is a second mortgage (even if it is with the same bank), it has to be negoiated seperately (and it is a separate department within the bank if indeed the second is held by them) The first lien holder does not negoiate with the second lien holder. It is the listing Realtors responsiblity to get the 2nd lien negoiated to where both of the liens are paid in such a way that satisfies the amount that the first lien holder is willing to accept for their payoff amount. I'm not sure if all of that makes sense, but I don't know how to say that with a simpler explanation.
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.
“It’s very much like hostage situations,” Sam Khater, CoreLogic’s senior economist, said of second-lien holders. “It’s like an all-or-nothing situation in terms of payoff, and they’re very unwilling to bargain.” You probably signed something that read's like this:

1. The sale of the property may result in a “Short Sale”. A Short Sale is a situation where the Seller’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 Seller’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)’ approval of the amount required to pay off in full the Seller’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 days’ written notice of Buyer’s intent to withdraw. At any time prior to Buyer’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.
0 votes Thank Flag Link Thu Feb 28, 2013
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