Home Buying in Maple Valley>Question Details

Larissa Long, Home Buyer in Maple Valley, WA

We were the buyers in a short sale on a house we are currently living in as renters. The bank (who strew the official owners of the property)

Asked by Larissa Long, Maple Valley, WA Tue Jul 10, 2012

accepted our offer and we were to close in 27 days. Our lender called or adherent after one lending option didn't come through so the listing agent immediately canceled the deal and relisted the house showing it the very next day. We had a back up lending plan. What are our rights? Were they allowed to cancel an already approved deal without or consent? Our agent is useless. We feel she is representing the sellers more than us even though she is not their agent. However she is the leading agent and has a relationship with them. Now we are having to show our house even though we were in the closing process.

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Answers

8
Hi Larissa,

The key question: Did your agent (via the listing agent) ever provide you with a "demand letter" outlining the terms of the short sale OR did you ever receive the MLS Form 90ss? The listing agent could have cancelled the deal if the terms of the short sale were not acceptable to the seller.

Also, unless you received a formal notification (90ss) that the seller consents to the terms of the short sale, the seller can still bail. If you didn't receive the 90ss and your time frame for short sale approval expired (usually 30, 60 or 90 days on Form 22ss), then the seller and listing agent can move on to another deal. You should check to see if you got a 90ss and how long you agreed to stay in the short sale on 22ss.

Just putting it back on the market no doubt feels like a kick in the gut, but the listing agent may be actually doing the right thing for the seller because she does represent her and needs to do what's best to protect the seller and help the owner avoid foreclosure.

In my opinion, YOUR agent should provide you more insight and education about the short sale process and let you know what truly happened. If your agent is a leasing agent, it might mean she chooses not to know about the short sales and/or she is seriously deficient in her knowledge and ability to explain what took place. Suffice to say, this is a professional's market and it makes sense to get help from an agent who understands the distressed market. Any one can write an offer, but it's another thing to take care of the client and see the process to close.

In summary, check your contract for the 22ss time frame and whether or not you received a 90ss.

Good luck,

Brian Manaois
1 vote Thank Flag Link Tue Jul 10, 2012
As you can see from the the questions and answers below, this is a can of worms. I cannot really give you any advice unless I know all the details. However, if your agent is not helping you, get yourself another agent. You might start by contacting some of us that have responded to you here. You should never have to go to any one besides your agent for advice. this is just unacceptable.

Good luck, & if you want any help, feel free to contact me directly.
0 votes Thank Flag Link Tue Jul 10, 2012
Thanks for the explanation. It sounds as if your agent should have at least contacted you to make a decision, and perhaps assumed you would want to cancel. That assumption might have been based on my concern about waiving the financing contingency, but even there you could have asked the seller to approve your change and thereby not waive the contingency. Perhaps there might have been timing concerns too, but even there you seemingly should have been contacted.

BTW, in Washington the "selling agent" is the buyer's agent, not the listing agent. It's confusing terminology.
0 votes Thank Flag Link Tue Jul 10, 2012
First let me apologize for writing the first entry on my phone. Wow, are there a ton of typos. Second, I appreciate all of the feedback.

We did have a signed agreement first in the purchase and sale agreement and then again once the bank accepted our offer. We even had our closing date. We were not approved for zero down but we had the money for a down payment so it was never off the table for us. This was clearly a decision based on the want to sell the home quickly not about what was ever best for us. Our agent should have at least have had the courtesy to speak with us before moving forward.

Our biggest concern was that OUR real estate agent never spoke us directly before cancelling the deal. I did some research and found out that only the bank can cancel the deal. That was not the case. The listing agent (which is not our agent) cancelled it after the seller approved , however, the bank is the only entity that can make that decision other than us.

As far as our agent goes, she is our agent but she is also the leasing agent so she has a relationship with the owners of the home and seems to be representing them more than us. Everything has been very forced and really out of our hands. This is not my first time buying a home and I know we should have had more negotiating room. However, our agent has not been relaying information accurately and we feel the selling agent has been running the show.
0 votes Thank Flag Link Tue Jul 10, 2012
Hey Larissa,

Sorry for your hassle and the headaches. It is the Wild, Wild, West out there with all the short sales and distressed homes on the market. It's hard to say if you have any rights without knowing more details.

First, do you have an actual signed offer between you and the seller? If it was just verbal, you have no agreement. Everything needs to be in writing to be enforceable.

Second, if you have a bona fide written offer, there are some protections to you as a buyer outlined in the contract. If the NWMLS forms were used, 22A of the financing addendum outlines the process for terminating a contract based upon the inability to get financing. If you were not properly notified, then you still might be able to work the deal.

Last, you need to check to see if your agent has the obligation to represent you. On page 1 of the contract, it should list who represents who. If the agent is representing both parties per the contract, then she, according to Agency Law in the State of Washington, owes you a clear explanation. If you are not being represented, you need to get an advocate to help you.

Again, if the agent represents both seller and buyer, you may need to hang in there if you want a chance at the house. It also might make sense for her to come over to the house and explain the details. There could be a misunderstanding or something was overlooked.

These are some of the initial considerations and there is likely more to the story and more to the contract than you realize. Buying a house under normal conditions is stressful enough and when you add short sales and bank owned homes to the mix, it can get pretty tricky and exhausting.

Feel free to drop a note or add to the thread if you have further questions or can provide more info. Hang in there.

Brian Manaois
0 votes Thank Flag Link Tue Jul 10, 2012
Hi Larissa,

If you have a signed contract (signed by all parties - you as buyer, seller, and the bank/seller's lender), the listing agent cannot cancel the contract. The only way a contract that has been signed by all parties can be cancelled is a cancellation is signed by all parties. Now, if you don't have a signed contract, that's another story. If your agent is not satisfactory, contact their Broker as soon as possible and voice your concerns. Their Broker actually holds the contract, not them (unless they are the Broker). You might also want to contact a Real Estate Attorney concerning your rights - especially in showing the house while you're tenants.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes Thank Flag Link Tue Jul 10, 2012
My prior answer indicated your earnest money might be at risk if you try to proceed. You, however, indicated that the agent wasn't representing you well. If your contract was the standard statewide form, and if "election of remedies" was checked on the first page, more than your earnest money might be at stake.

That's a good example of why an attorney (or anyone else) would need to review your documents prior to giving you a firm answer.
0 votes Thank Flag Link Tue Jul 10, 2012
This is a legal question which would require you to hire an attorney to answer the questions, and in any case, it would be necessary to review your documents to review what the bank and the seller could do.

That being said though, the bank is neither the buyer or the seller. They are a third party that needs to agree to release their lien for less than what is owed. As a practical matter, they can probably do whatever they want. They are probably not bound by any contract.

The real question is what can your sellers do? It's very questionable whether they could cancel the contract just because your first loan didn't go through. The thing to consider though is that changing lenders or types of loans may likely waive your financing contingency, which would place your earnest money at risk. Thus you might actually prefer the purchase and sale contract to be cancelled.

Again I would caution you that you need to consult an attorney. They could also cover for you the terms of showing that you have to accept. For example, whether you can require 24 hours notice for a showing.
0 votes Thank Flag Link Tue Jul 10, 2012
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