Home Buying in Boston>Question Details

Jgmacarthy, Home Buyer in Massachusetts

I currently have a signed P & S on a short sale, and we are awaiting bank approval. The P & S states a closing date of 6/30.

Asked by Jgmacarthy, Massachusetts Mon Jun 28, 2010

All of our financing and HO insurance is approved and lined up. The deal will most likely not close by the 30th and we have been asked to sign an extension. I am wondering if we do not sign an extension and cancel the deal as the the seller could not fulfill the original closing date, are we able to receive our earnest money back as they have defaulted on part of the agreement?

Help the community by answering this question:

Answers

9
Short sales are so tricky, you are basically at the mercy of the bank. If you are trying to get the 8000 credit it needs to close on time. The bank is aware of this. I would hang in as long as possible I'm sure you are getting a great deal on this property and the rates are so low right now its a great investment. Good luck.
1 vote Thank Flag Link Tue Jun 29, 2010
The details of such are in your Purchase and Sale agreement. There should be language that spells out what happens to earnest money deposits in the event of non-performance.

Most standard Purchase and Sale would allow you to cancel the agreement and receive your earnest money deposit back. (Technically the non performance of the seller would cancelthe contract) The devil is in the details and every contract can be different. Read you contract and if you do not understand it consult an attorney.
Web Reference: http://www.thehousewiz.com
1 vote Thank Flag Link Tue Jun 29, 2010
If the sellers were not able to close on the date specified then by all means you should be entitled to your deposit back. The main reason for the extension request is to keep the deal going to the sellers benefit. Without the extension the deal is officially expired.
0 votes Thank Flag Link Wed Jul 14, 2010
Hi there,
Contact an attorney right away. Short sales are a nightmare, and you are finding out exactly why. I am so sorry that you are going through this, but it happens all the time with short sales. They are a real grind.

Get a real estate attorney immediately and try to get that money back.

Cheers,
Bill P
0 votes Thank Flag Link Fri Jul 2, 2010
This is the number one reason not to pursue a short sale. i tell clients all the time that the probability of them closing is so low it usually not worth the effort. Short sales are essentially properties that are not actually for sale - i am waiting for it to become illegal to market them unless there is written bank approval for a specific price. it is a shame to watch buyers continually waste their time and money on these sales.

Good luck!
Web Reference: http://territoryre.com
0 votes Thank Flag Link Tue Jun 29, 2010
Kevin gave you a great answer. It sounds as though you want to opt of the deal. Read your contract and consult with your realtor or real estate attorney.
Belinda Arroyo
Realty Direc t
508-446-5693
0 votes Thank Flag Link Tue Jun 29, 2010
OK - reading is fundamental - The facts are that if the P & S does not state extension values and does not in fact execute on the day indicated you are not backing out, it failed to be fulfilled. If that benefits you then that is what it is. If you want to extend - I am sure the bank would have no problem if you made such an arrangement. Now as fasr as funds returned, usually not a problem if all parties where in agreement, the bank is not interested in stealing your funds as a rule so I would do this..............contact your agent tell him the agreement does expire and you are opting not to continue. This is your money, trust it to no one and cover your butt always. If all does not come apart smoothly then contact your attorney. It is true however that a short sale con extend many time and should have been considered. Just tell you agent and I am sure it will be fine.
0 votes Thank Flag Link Mon Jun 28, 2010
In all likelihood you are released from your obligation if the closing date passes and you do not sign an extension but it probably would be a good idea to check with your attorney--I'm assuming you had one since you already signed a p&s. I'm assuming you have not yet heard from the bank as to whether they will accept the deal--if they have accepted and it's just a matter of tying up the legal loose ends--and you still want the house--why not stick with it?

Ellen Friedman, Keller Williams Realty, ellengfriedman@comcast.net
0 votes Thank Flag Link Mon Jun 28, 2010
What is your agent suggesting--Keep in mind that short sales are by no means fast sales and are never guaranteed to close on time--as for backing out--review the contract as the answer lies in the document--or consider consulting with an attorney who specializes in real estate and have all related documentation reviewed.
0 votes Thank Flag Link Mon Jun 28, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer