Home Buying in Troy>Question Details

Bannrick, Home Buyer in Las Vegas, Las Vegas,...

If a buyers financing fell through why are we being told our offer cannot be submitted until the other buyer signs he does not want the property?

Asked by Bannrick, Las Vegas, Las Vegas, NV Tue May 10, 2011

We were told the property was relisted because the first offer fell through on financing and would expire at 5:00 pm. on Monday. This is a bank owned home. Monday evening we met with the realtor and signed the contract, gave our earnest money and made a cash offer. Today we're being told the buyer whose financing fell through must sign off that they no longer want the house, before they can submit our offer. The realtor never mentioned this to us until today. We're also being told this may take weeks if the buyer doesn't sign off, even though his financing fell through. Is this correct and can we get a different realtor? I think that detail should have been mentioned previously, not after we've signed everything.

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Bannrick,

Boy that is frustrating but dealing with banks usually are. The one thing I don't understand is why the listing agent put it back on the market. If the previous buyers offer is still good & he is still trying to figure out financing or getting enough cash. Why put it back on the market. At best it should of been CCS which means there is an offer but continue to show. In that case all other offers would be considered a back up offer & wouldn't be submitted till the 1st one fell through completely. If it was CCS then your agent should of told you. If it was BMK (back on market) & the listing office didn't say anything when your agent scheduled a showing, then it isn't your agents fault.. Are you buying in Troy MI or Las Vegas? I'm in MI so that's what I know. Every state has different laws. The bank you are dealing with can be located in another state as well & they're not always familiar with the different states.
Hang in there. Your agent is working for you & not the bank. Remember that.
1 vote Thank Flag Link Tue May 10, 2011
The bank needs the release to free the property up--they can't be under contract twice. They have to be sure the prior buyer is out of the picture due to contractual obligation. And to release the prior EMD. You may want to ask if you can submit your offer with it specifying that your contract is subject to mutual release of the first offer. Good luck!
Web Reference: http://www.MyRealtorJay.com
1 vote Thank Flag Link Tue May 10, 2011
As has been stated, a release from a prior contract must be in-place, or a new contract written in-part contingent upon the release of the previous transaction. A property can not be sold twice, thus that is how it must be done. Michigan is not a, "time is of the essence," state and thus closing dates are targets, and nothing more. I am a real estate expert, not an attorney. I don't and can't provide legal advice and/or counsel and you should seek such only from a licensed attorney. If you would like a referral to a metro-Detroit attorney, I'd be happy to provide one.

Best to you. I hope things work out in your favor.
Web Reference: http://DoorToDreams.com
1 vote Thank Flag Link Tue May 10, 2011
Bannick pointed out in a previous post that this offer was written w/ the listing agent, which adds to the confusion... The agent is working for the bank's fiduciary duty (unless this was written as dual agency).
0 votes Thank Flag Link Tue May 10, 2011
The purchase agreement has a contingency clause in the obtaining the mortgage part. It states that the buyer usually has (but not limited to) 30 days to obtain a mortgage or if he can't at the sellers wish may declare the offer null and void. If a seller hasn't granted an extension then he is free to accept another offer. That is real estate law,

The rest of the stuff you are experiencing is the broker policy of protecting his assets from getting involved in any law suit. Check with your agent to see if the seller (bank) has granted an extension. If not the bank may accept your offer with no repercussions from the first buyer.

Another possible problem is the banks agent not understanding real estate law enough and is relying on your agent or broker' advice in his decision making, and they are busily trying to protect their assets.
If you indicate you may take legal action you may break their stalemate.

This is just a broker opinion and not intended to be gospel-just an opinion. Before pursuing any remedy you may seek an attorney opinion. More of that protection of my legal assets stuff
0 votes Thank Flag Link Tue May 10, 2011
Can't blame your agent. Banks are NOT that easy to deal with, and most information comes out just like it did when you made your offer. The bank could accept a backup offer, so I would certainly have the agent submit it
again



David Cooper..Las Vegas Foreclosure Investor in Bank Owned REOs with Cash Flow. email or call for FREE daily list. +1-7024997037 not a real estate agent
0 votes Thank Flag Link Tue May 10, 2011
Understand your frustration and see that you have received many good responses.

Just a couple things. As mentioned, the release of the previous purchase agreement will need to be acknowledged by both the buyer and seller to assure that there is no dispute in order to release the earnest money deposit to the buyer. If there is a dispute than there will be time needed to allow for the resolution of that matter. Meanwhile, it is possible that the listing broker has a stipulation in their listing agreement that does not allow for additional offers to be submitted or presented while there is an existing offer to purchase. The legalities and time of the essence matters are not always clear without legal interpretation. As Derek Brauer mentioned, many of us are real estate experts, but do not have the ability or knowledge to provide legal advise and counsel.

As also mentioned, it is likely no fault of the agent you are working with, merely the circumstances of the situation.

Best Wishes to you. Hope it works out the best it can for you.

Kay Pearson, CRS
Associate Broker
Real Estate One - Max Broock
31 S. Main Street
Clarkston, MI 48346
248-860-0366
KayPearson@MaxBroock.com
Web Reference: http://www.KayPearson.com
0 votes Thank Flag Link Tue May 10, 2011
This is not really your realtor's fault, there's always that issue of "the earnest money deposit". If indeed the deal fell through because of the financing the offer should be null and void after the target close date on the purchase agreement. Perhaps the initial buyer requested an extension to the contract so he could explore another lender for his mortgage. I have heard of the seller not signing off on the contract when the deal goes south because they might feel entitled to the earnest money deposit if they didn't believe the buyer had a legitimate reason to pull out of the contract but the buyer would only not sign off on the contract because they were trying to get financing from a different source or perhaps even come up with cash to close. They can do this if they ask the bank for an extension on the allotted time to close. Sometimes the seller (bank) will give the buyer another 30 days. Sometimes not. Maybe this is what is going on. Ask your realtor to call the listing agent and find out what's really going on.
0 votes Thank Flag Link Tue May 10, 2011
The contract does not end becuase the date for gettting a mortgage expires, it just means the buyer now can not get their deposit back but has until the date on the current contract to close. The buyer can submit a signed release asking for his deposit back or to be released from the sale. Either way you need a release or an expiration of sales contract to be able to submit a new offer. If you are working with a buyer broker they may not have known the whole story, not all agents are experienced in reo homes.

http://www.trulia.com/blog/scott_godzyk/2008/08/so_you_want_…


Please see my blog for more tips and advice on buying bank owned homes
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue May 10, 2011
You can have your agent do a contingency addendum. Your offer is made contingent upon cancellation of the first buyers offer. Not sure why this is a hick up - unless it's just one of those weird stipulations in the banks addendum with the first buyer. I know the bank usually has a sign off requirement by both seller and buyer in the event of cancellation and it's probably the bank mitigators work load which causes a delay in signing. In the mean time the listing agent will be collecting contracts to resubmit to the bank and the best for the banks bottom line will win, so put your best foot forward.

good luck.
0 votes Thank Flag Link Tue May 10, 2011
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