Home Buying in 22079>Question Details

Mewing8, Home Buyer in 22079

Seller agrees to the sale price on a short sale, the first and trust agreed to the short sale, the second trust was pending. Seller then backs out.

Asked by Mewing8, 22079 Mon Mar 22, 2010

My wife and I signed a contract for a short sale on a house. The first trust agreed to the short sale and the second trust was pending. The owner, after 4 1/2 months waiting, has backed out of the deal. The reason the seller is backing out is because the first trust has agreed to the short sale but is still holding the owner responsible for 100K still owed. The owner has sold some other property over seas and now has the money to make amends with the banks. Do we have any legal recourse to force the sale to us?

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Vivianne Rutkowski’s answer
Mewing8,

Think of the short sale as a sale that is contingent on the lender's approval - the same way as buyers have contingencies, home inspection, financing, etc.

In this case, sellers decided that this transaction was NOT in their best interest and they decided to get out based on the lender approval contingency.

Can you blame them?
You would NOT want the seller to come up with $100K to pay off the mortgage - unless money is no object - so YOU could purchase their home, would you?

Unfortunately, it's the risk buyers take when purchasing short sales - sometimes contracts do not end in settlement.

Fortunately, there are other homes available on the mrket.

Good Luck!
0 votes Thank Flag Link Mon Mar 22, 2010
Check your contract and speak with your agent (I assume you hired him as a buyers agent). If contract was contingent on straight up or down 3rd party approval with a ratification by buyer and seller; does not sound like there was approval by that third party - another contingency thrown in by the 3rd party that buyer and seller may have needed to agree to contractually.
0 votes Thank Flag Link Mon Mar 22, 2010
What did your agent say? Typically it's not worth suing unless there are damages...which I doubt you can prove at this point. is the first trust holding the seller responsible for 100k or the 2nd trust. My guess is it's the 2nd. The foreclosure/short sale procedures and negotiations are changing every day. I always leave an out for my purchaser(s) so we can continue to investigate other properties....that are not short.

Best of luck to you here..and I suggest you just move along and forget this property. You can read carefully the short sale addendum which should have been used in your offer and check the verbiage so you understand it in the future. Most agents will review this with you so you know what you sign.

Any questions..

Erik J. Weisskopf, ABR,CRS,GRI
(c) 703.216.1222
Erik@AskMeAboutHomes.com
0 votes Thank Flag Link Mon Mar 22, 2010
Read the contract. It depends on how the contingencies are written. If you do have recourse, it will be tricky expensive legal recourse in which you may be able to sue for specific performance (for the sale) which will be wacky if the bank has since foreclosed and sold to someone else; and/or damages if you can prove them. A trip to an attorney's office is likely in order at this point.
0 votes Thank Flag Link Mon Mar 22, 2010
No, read your contract. In almost all cases the Short sale is contingent on agreement by the Sellers' creditor(s) and the Short Sale addendum probably states that either party can cancel prior to acceptance. This is the risk that you take when offering for a Short Sale. Even with improved processes and government pressure the percentage of Short sales making it to closing is still far less than traditional sales. You can get a deal, but you are "rolling the dice".
0 votes Thank Flag Link Mon Mar 22, 2010
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