In Virginia the pursuit of a short sale is considered a confidential financial fact. The Seller is not obligated to disclose the issue in advertising. However, if they needed the contract to be contingent on their mortgage company's approval to sell without paying off the debt, they would have to disclose it prior to ratification.
In this case it doesn't sound as if it would be a short sale so long as they received a certain price point. Therefore it sounds as if they did the right thing by trying to negotiate terms where the net was sufficient to pay off the pending debt on the home.
Additionally Sellers in Virgina are not required to make disclosures about the physical condition of the home. Virginia is a buyer beware state which is why it's wise to get a home inspection.
We are working on providing a consistent, more accurate method for entering and searching for distressed properties. Starting next week, a new Transaction Type field will be added to Matrix and Keystone. All listings must be categorized as one of the following:
Standard sale refers to a property which is available for sale without third party involvement or approval.
Potential Short Sale refers to any property that is underwater and the sale is subject to bank approval.
Foreclosure refers to a property that is subject to foreclosure proceedings. Until the foreclosure proceedings are finalized, the seller still owns the property.
REO (Real Estate Owned) properties are bank or lender owned.
Other/Undisclosed should be selected when you do not have your sellerâ€™s permission to disclose the property as a distressed sale.
It will be the sellers decision to disclose if a home is a potential short sale.
Dwayne Moyers, Realtor
Long and Foster Realtors (Woodbridge Office)
Maryanne Moyers, Associate Broker
Long and Foster Realtors (Fredericksburg Office)
Top 2% of Realtors Nationwide
NO. Legally sellers are NOT obligated to disclose their financial or personal situation in MLS, at least NOT in the state of Virginia. It might be different in other states. Some Sellers do disclose short sale in MLS, but it is each Seller's personal decision and listing agents should have the decision to disclose in writing.
However, by LAW, sellers MUST disclose the short sale to buyers upon receipt of an Offer, so buyers can make an informed decision - your seller satisfied this condition by informing you about it and you agreed to a higher price, which tells me you thought the property was worth the higher price as compared to other homes in the area.
In addition to the above, the new 2012 real estate contract in Virginia makes every sale "as is" transaction. It means, buyers must do their due diligence more than ever before.
In your situation, if the seller is wise and wants to keep their credit rating good by avoiding short sale, they should make every effort to do the repairs. My suggestion to you is that IF you like the house and it meets you criteria, you may be wise to overlook small items, unless the repairs are costly and deduct from the value of the house. This is a decision that only YOU can make.
I guess we could call this a cautionary tale. Never allow yourself to be pushed into making an offer that is higher than what you really, really feel the home is worth, particularly if there is no 'wiggle room' to account for any issues uncovered during the home inspection. Second, read the seller's diisclosure carefully and do a careful visual inspection yourself before making your offer or accepting the seller's counter offer. And, third, if you feel there is no room to negotiate home inspection issues, then base your offer and counter-offers on the worst case scenario.
If you still like the home, and are willing to wait, then insist on a credit toward repairs and if it throws them into a short sale situation, so be it. I have a feeling they will end up in that situation anyway. Otherwise, walk away and chalk it up to experience.
Regardless, it's not deceptive advertising in my opinion and unless Virginia uses a real estate contract unlike any other I've seen or used, you have the right to terminate your contract now and get out or , try to negotiate with the Sellers to address the needed repairs.
Do yourself a huge favor, don't waste your time on short sales, most go now where and take months for the buyer to realize their wasting their time. Fifty percent of the time or more, the Sellers aren't approved for a short sale and the property ends up in foreclosure.