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Cheers442, Home Buyer in 08037

does a contract ever expire in a short sale?

Asked by Cheers442, 08037 Sun May 3, 2009

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6
Laura Giannotta’s answer
If you put in an offer on a short sale, it's recommended that in the additional contractual provisions section of the contract the that language be added to state that the contract expires on a certain date. You can extend that date, but it gives you an out.

Laura Giannotta
Keller Williams Atlantic Shore
1 vote Thank Flag Link Mon May 4, 2009
Yes, depending what the Agreement of Sale states. With a short sale, a Buyer should always protect himself by stating a specific timeframe giving Buyer the option to cancel contract. Recommended timeframe is 90 days from expiration of Attorney Review Period.
If no settlement date is stated in the Agreement or there is no timeframe stated, the contract is never expired until bank removes their acceptance contingency with an acceptance or non-acceptance.
Hope this answers your question.
0 votes Thank Flag Link Sat Jun 20, 2009
It depends on whether or not the attorneys add a clause to the contract stating so. Since they take so long to close (most of the time) attorneys are starting to cover their buyers by putting in an expiration date. At that time the buyers can walk or extend.
It's a really good idea!
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Mon May 4, 2009
Cheers442: Unfortunately, no. In NJ, the closing date is "on or about," needed because attorneys, often involved here, need the flexibility of answer court calls, etc. The normally used contract does not have a "date fixed, time certain" closing. Since we hear that at least some lenders involved in short sales are not very responsive, they can delay the closing for months at a time. The other timed dates in the contract still stand, such as the time for inspection. They are spelled out and fixed.

What any short sale buyer (and seller) needs, is an addendum to the contract for short sales. Our office has generated one but not all Realtors have been as diligent. You might well have your attorney generate such an addendum, if you are not already under contract and if you are, I believe that the appropriate procedure would be to have a "Time of the Essence" letter sent. This gives notice that, after a reasonable time for the other party to get organized, they must appear, ready to close, as stated. Otherwise, they will be in default and would bear the consequences for default. This might mean more than just a return of your deposit and the voiding of the contract but that would be a legal matter and to get advice on the subject, you must consult legal counsel, not a Realtor.

Best of luck.

Bill
0 votes Thank Flag Link Mon May 4, 2009
Hi Cheers,

Yes, a contract does expire in a short sale or conventional sale as well. In your agreement of sale there is always a closing date affixed to your contract. If you do not close on or before that date, and there is no written extension in the form of an addendum to the agreement of sale, then the sales contract is null and void, and your good faith deposit money is released back to you. In short sales, a closing date may need to be extended in writing more than once, as the banks are still slow in responding and getting the transaction to closing.

Good luck, and if you need further assistance, please do not hesitate to contact me.

Debbie Baten
Realtor/Associate
RE/MAX Community
Mays Landing, NJ 08330
Office: 609-909-1111 x20
0 votes Thank Flag Link Sun May 3, 2009
Hi Cheers442, good question. If you have an offer out and have decided to move on, I recommend you terminate the offer in writing.

I'll be interested to read other responses.

Best,
Jeannie Feenick
Search and connect at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sun May 3, 2009
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