Home Buying in 53227>Question Details

Bill, Home Buyer in Milwaukee County, WI

We are waiting for an answer from the bank on a short sale (6 months!). Found another house we like.

Asked by Bill, Milwaukee County, WI Sat Dec 24, 2011

The closing date on the seller accepted offer is this week with no closing in sight. If we don't renew the contract can we back out and still get our earnest money back. The realtor keps giving us the run around and actually admits she doesn't know what's going on. Although this house is still our first choice we are afraid it's just not going to happen.

Help the community by answering this question:

Answers

13
BEST ANSWER
Good Morning Bill!

It sounds like the closing on this house may not happen! Short sales can and do typically take longer to close than the non-short sale transaction; however, buyers typically have a threshold for patience that may expire after a 6 month wait (I know that I would be less than thrilled waiting 6 months for a home to close!).

If you really love this house and it's "the one" than carry on and renew the contract. However, keep in mind that the New Year will bring many new homes on the market...you may find new and better opportunities in a non short-sale home...one that will allow you to close in a more realistic time frame (45-60 days).

Happy Holidays....Merry Christmas! May the New Year bring a new home for you!! : )

Kris Plechaty - First Weber Group Realtors
262-720-5157
kplechaty@firstweber.com
http://www.krisplechaty.firstweber.com
0 votes Thank Flag Link Sat Dec 24, 2011
Bill in this day and age 6 months is too long. We have short sales being approved in as little as 3 weeks and as much as 3 months. If it is taking that long there is a problem. Most often the short sale package is not complete, the offer is too low, the seller is not approved to complete a short sale or there is more than 1 mortgage. It is ever so important for the listing agent to have daily contact with the banks negotiator. You may want to get a real life and real time update and be prepared to ask fro a full release.
Web Reference: http://www.ScottSellsNH.com
2 votes Thank Flag Link Sat Dec 24, 2011
Bill,
You've several question here and I will answer each with simplicity:
1. You may back out now IF your contract mentions anything about a third party agreeing to the terms of the agreement. Since the third party (bank) has not approved the sale you do not have a fully ratified contract. The earnest money is tied to the contract, so the earnest money should be refundable unless language in the agreement speaks to the contrary. If the contract expires, you can be done.
2. Clearly patience is difficult with an agent who is incapable of communicating, however, many agent have found themselves in this quandary with few if any answers. Most of us are smart enough to never admit we do not know what is going on.
3. Many buyers before have found what they believed to be the ideal house and then found something better. One fix is to keep the sale going and then have your agent take you out for look at other possiblity. If what you find doesn't match up then it will assist you in having more patience for your present deal. If you find something better, happy days. The best advice an agent can give is, "Never fall in love with a short sale, it may break your heart".
1 vote Thank Flag Link Sat Dec 24, 2011
Hi Bill:

Short Sale is not for everyone. It requires tremendous patience. However, some banks do move quickly these days even with second lien holder. Having said this, six months in process without a clear indication of progress towards consummation is frustrating even for the individuals with patience and time to dispose.

Before you back out, review the houses for sale on the market with your realtor and reassess your emotions vis-a-vis the subject property and compare its price and pertinent information relevant to the condition and other criteria to current available listings.

If you believe that the subject property is still the right property for you, find out if you can only extend it for a shorter period of time. Maybe, 30 to 60 days more. As another realtor mentioned, there could be other properties that will become available soon that might whet your appetite. Discuss this option with your realtor.

Good Luck.

Best.

Maria
1 vote Thank Flag Link Sat Dec 24, 2011
You shouldn't blame your realtor. Many times it's very difficult to get answers from the bank. I worked with a buyer on a short sale that took over six months to go through. I called two or three times a week to check the status and the bank would tell us every week that "next week", We would have an answer. I personally spoke with bank officials and didn't get anywhere. The bank is going to do the short sale in their own time. If you still want the house hang in there and see what happens. Otherwise, when the contract expires and you choose to get out rather than do an extension, you can get your money back.
1 vote Thank Flag Link Sat Dec 24, 2011
Bill, you can withdraw if you feel that serves your interest best. However, if this is still the house you want, this is the one, you should hang in there. You may be at the five yard line and not know it.

Scott Hulen is very generous with his 50/50 assessment. For the very reason you find yourself in, over 70% of those submitting offers on a short sale get happy feet and move on. It is possible, after you withdraw, a new buyer will submit an offer, and since you have 'seasoned' the short sale process, the second buyer may close in a matter of weeks or not at all, as that is the nature of short sales.

Anyone suggesting they 'know' exactly what is going on with the asset managers conversations within the banks structure, the dialog with the PMI company, second lien holder, investor group, loan servicer and possibly the HOA is implying a reality that does not exist. However, having a negotiator who can by the nature of their persistence and expertise, can influence the speed and direction of the decision that must be made is possible and most certainly beneficial.

The 'wild, wild, west of real estate, known as Short Sales is an aggrevating experience. Many, however, find the wait to be well worth the home.

Best of success to you.
Annette Lawrence
Broker/Associate
ReMax Realtec Group
Web Reference: http://www.MyDunedin.com
1 vote Thank Flag Link Sat Dec 24, 2011
Hi Bill, as mentioned by the other agents, review your documents, in particular the addendum SSO. There should have been a date used to allow you to "mov e on" in the event the sellers lender takes longer than you allowed. If this date has passed you have the option to move on or if the seller agrees, extend the date. Discuss this with your agent ( I'm assuming they represent you??). In the event your agent is unsure, ask the agent to speak with their manager to get some answers for you.
0 votes Thank Flag Link Sun Dec 25, 2011
In some states like Florida you can withdraw an offer since it has not yet been accepted, once accepted it is then too late to get your escrow funds back. Again here in Florida there is just a form to be filled out and signed.

I never have my buyers put up ernest money on a short sale or a foreclosure until the offer has been accepted. The short sales take a very long time to be accepted or not and in the mean time you could have been making money on that ernest money in your account rather than the account of the brokerage, title company or attorney office

Best wishes on your decision and happy holidays!
Web Reference: http://www.TheBeachLady.com
0 votes Thank Flag Link Sun Dec 25, 2011
Hi Bill,

Based on your agreement, you are so close to finding out what the bank's intentions are without pushing the envelope. Why not wait a few nore days prior to making them aware of your interest to explore other options. Wouldn't it be a nice Christmas gift to be informed that they are willing to close in the very near future......

Merry Christmas,

Bill
0 votes Thank Flag Link Sat Dec 24, 2011
Bill,

I am assuming that you signed an SSO Addendum with your offer. Check lines 25-30 to see what it says. Be sure to review all documents with your agent to make sure that you are, in fact, within your legal right to walk or you may be risking your earnest money.
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Sat Dec 24, 2011
Bill,
Discuss this with your agent and review your contract . Most of the time your contract has a date or time period that allows you to cancel your contract and get your earnest money back if you don't receive a answer from the seller's lender for the short sale approval. It is often difficult for an agent ( buyers agent) to get update status because the seller's lender will only discuss the file status with approved third parties. Usually the seller's agent is approved, but they are not always informed by the seller's lender as to the status of the file. It appears that your agent is being honest with you and is most likely just as frustrated with the process as you are. Hopefully you are working with the same agent on the new home you just found. I have had short sales that have taken over 9 months to close.

All the best,
Gary Geer

http://www.GaryGeer.com
0 votes Thank Flag Link Sat Dec 24, 2011
Hi Bill,

WOW, the Realtor doesn't know what's going on? That is unacceptable! They should.

Have your Realtor contact the Listing Agent and have the Listing Agent contact the short sale lender to find out the status. (The Listing Agent should be doing this constantly anyway).

If you do not extend/renew the contract, you should get your Earnest Money Deposit back because you won't be in breach of contract if it's the seller/lender who can't close on time.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes Thank Flag Link Sat Dec 24, 2011
Although I do not know enough about this situation to accurately answer this question. My advice in regard to short sales is to stay away from them for precisely this reason, the “deals” are generally just as good when looking at estates and REO’s and these close 99% of the time. If you read the real estate websites there are daily questions such as yours about why the short sale is not closing. Your agent should of informed you at the start of the process it could take up to a year to close and the success rate for short sales is less than a 50/50 shot (I’m being very generous at 50/50 as I believe the real number to be closer to a 10% success rate) Good Luck!!!
0 votes Thank Flag Link Sat Dec 24, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer