Home Buying in Illinois>Question Details

M, Home Buyer in 60827

I have a contigent contract pending but before the closing the seller came along with a short sale situation

Asked by M, 60827 Tue Oct 23, 2007

that is causing me not to close , I now have seen another house that is empty and ready to move but the other realestate agent is saying they will try and keep my earnest money..Is this fair and legal to pull me along with someone elses short falls. I also dont understand how and whythey accepted my offer for less than what they owed

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Cindi Hagley, Prudential’s answer
I just had this happened to me.....as a buyer and a Realtor?!I fought to get my deposit back (and did eventually....) Now we are going after the selling broker for commission since the buyer (me) performed and the seller could not.The short sale was not disclosed here either.
Web Reference: http://www.cindihagley.com
2 votes Thank Flag Link Tue Oct 23, 2007
Cindi Hagley,…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
Here is my take. I'm not an attorney or an agent but I am in IL. The "contingent" contract, is that a contingency for you to sell your home first in order to buy this short sale home? When the seller accepted your offer, he may not have been in default. There is nothing wrong with selling your house for a loss and paying the bank what you owe them. However, if your home didn't sell and the seller didn't get any back up offers and the clock keeps ticking and he keeps getting further and further behind financially, his situation may have changed. He is now desperate. But I would think a bank approval for the sale would be a material fact that changed the terms of the contract. Look at the dates on your contract and see if "time is of the essence" is in the performance section. That will let you know who might be in "breach". And of course, contact your attorney.

Finally, to determine if there was a lack of disclosure, search the recorder of deeds to see if there was a "Les Pendens" on his record and when that occurred in comparison to your original contract date. If you are in Cook County, you can do that by the pin number of the property (which should be on the listing sheet and the contract) or by the seller's name. The web address is: http://www.ccrd.info/CCRD/il031/index.jsp
You can usually find out what he paid and how much is mortgages are for as well.

Good luck,
Ruth
Web Reference: http://www.oak-park-il.com
2 votes Thank Flag Link Tue Oct 23, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
If the Seller can "perform" then you could loose your deposit. The short-sale is NOT relevant to the escrow unless it prevents the successful close of the transaction. In California this would have to be disclosed via the transfer disclosure statement. You would then have 3 days in which to disapprove the "supplement to the TDS" as this is a new "material fact". However, one could argue that if they have successfully negociated the "short-sale" from the lender and the transaction CAN close, YOU might be in breach if YOU donot perform as per the contract. I would check with your local attorney and also query the agent's as to the status of the "Short-Sale".
2 votes Thank Flag Link Tue Oct 23, 2007
um ok now this is a good one you wrote an offer and now its a short sale and you didnt know nice job realtors. Call a lawyer and move on. Lets be frank shall we if you didnt know the terms and conditions signed the contract and now all of the sudden theres a short sale come on, whats the hard ship to the seller(foreclouser) best for you to call an attorney? whats the difference dont you want the house anymore? Now this other house is ready and what ever . night mare.
0 votes Thank Flag Link Tue Nov 11, 2008
The listing agent should have disclosed it was a short sale (there was not enough equity to close the escrow) in the listing or when the offer was accepted especially when it needed to be approved by the buyer. Unfortunately some agents do not ask enough questions.
0 votes Thank Flag Link Tue Oct 23, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
Hi M, I would suggest you hire a real estate attorney because it seems the listing agent and seller purposly manipulated the situation to get an offer in. How hard can it be to figure out if the home will be sold short. It's obvious they did it purposly. You should get your money back asap and they should be kissing your A$$ for not suing them both.
0 votes Thank Flag Link Tue Oct 23, 2007
Are you saying the seller can't close because they owe more to the bank then the proceeds and they won't let you out of the contract to buy another home? Consult a real estate attorney if you want out of the deal. You need the sellers to sign a cancellation to get your money back, it sounds like they won't. An attorney can get a statutory cancellation for you or at least give you your options.
0 votes Thank Flag Link Tue Oct 23, 2007
The Seller has now breached. Depending on your terms, there really is no way they can keep your Deposit. I would need a bit more info.....What were the Seller's obligations within your agreement? That is where you find the "breach". If they want to keep your Deposit you can simply hold them off the market by not cancelling. That should get their attention. You may want the agent to notify the Bank of the situation your unscrupulous Seller has created.
Michael
0 votes Thank Flag Link Tue Oct 23, 2007
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