Question Details

Rachel, Home Buyer in New York, NY

In a short sale , what happens if I find a better home after having placing an offer on a short sale home ?

Asked by Rachel, New York, NY Tue Sep 1, 2009

In a short sale what happens if I find another home after placing an offer on a short sale
home and the offer got accepted. In that case , will I lose the earnest money ? If I place an offer now , how long will it take for the short sale process to complete ? Does it always take 3-4 months or does it happen faster ?

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Answers

4
The terms of your contract will specify whether or not you'd lose your EMD.

There's no standard duration for short-sales; each one is different.
0 votes Thank Flag Link Tue Sep 1, 2009
Many questions, and unfortunately one best answer: It depends...

I'm not familiar with your real estate contracts in New York, but in general, most contracts to buy real estate include clauses that allow you to cancel the agreement if certain things happen - and sometimes if they don't. For example, in a short sale the most frustrating, common, and unpredictable thing is when and whether the bank will ever accept the offer and agree to close. From what you've said it sounds like the seller accepted the offer, but you're waiting for the bank to finish their stuff. Delays caused by the bank might be a reason to cancel the contract in your situation. In addition, you might have inspection issues, lending issues, and possibly other items to consider.

You definitely need to discuss this directly with your Realtor and/or attorney. Either or both should be able to help you find out how you can exit the first contract gracefully without losing your earnest money. It is most likely possible - but by no means guaranteed.

As for the last part of your questions, short sales take as long as they take - unfortunately. There simply isn't a 'rule' you can use about that. It just depends on the situation, and to a huge extent, the bank invovled. Some are easy and quick to work with ... others take up to six month or even more.

So - back to my earlier comment - talk to your local Realtor and/or attorney. This situation really requires very specific knowledge of your individual contract and situation to provide the most accurate answer.

Good luck!

Terrell
0 votes Thank Flag Link Tue Sep 1, 2009
On a short sale you have a contingency of bank approval. Until written approval is received from the bank you may cancel the offer and receive your earnest money back.
0 votes Thank Flag Link Tue Sep 1, 2009
If your offer was accepted and all contingencies were met (including lender approval) you have a contract to buy. If you back out, you could lose the earnest money. Read your contracrt, or ask your Realtor. Concerning the "How Long" question - it depends. In my experience, many weeks can go by with no news. As the buyer, you have no control over this process, except to present the best offer you can. Even after lender approval, there could be a "gotcha" that delays the process more. (For example, a tax lien suddenly appearing - can't close until there is some resolution...)

Best of luck!
0 votes Thank Flag Link Tue Sep 1, 2009
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