But I'm curious....When you say the short sale approved by seller, who do you mean? The homeowner or the bank?? It's all up to the bank (lienholder). And if the appraisal came in high, then the contract will need to be renegotiated. Not sure why the listing agent wants to cancel. Again... what does your REALTOR say???
Promotion Realty, Inc.
The seller can accept or reject your offer but then the lender/bank holding the note makes the final decision as to whether or not they are going to accept your offer. If all parties agree then all parties must sign the Purchase & Sale Agreement along with the Real Estate Addendum. If all have accepted your offer you then pay your lender to have the home appraised. If you had an accepted offer and the appraisal came in higher I do not see how the listing agent can cancel the contract. Are you represented by a realtor? If not, I would seek legal counsel.
The process for a short sale if done properly is:
1. The agent determines fair market value range using comparables. If the market value is less than what is owed the agent should advise his/client to hire a real estate attorney.
2. The owner, attorney and agent mert to discuss the plan of action to talk to the lender about doing a short sale.
3. Most times the attorney and the agent will meet with the lender and explain the situation and get the ball rolling to get the lender to allow a short sale, by putting together a package to present facts and figures.
4. The ball is now in the lenders court and they will do their due diligence to have the property appraised and analyze the risk. This step could take a while to get done.
5. Best case scenario is the lender agrees with the data and allows a short sale.
6. Once this is done, the property is listed for fair market value, agreed to by the lender, however this does not neccessarily mean this is the bottom number they will accept, and it is up to the agent to bring in all offers to present to the seller.
7. This is the tricky part, once the seller accepts an offer, it still needs to be presented to the lender. It is vital to present one offer to the lender, and make sure all the "I"'s are dotted and the "t"'s crossed BEFORE sending in for approval. ( this reduces response time from the lender. Anything not done properly, the lender sends it back and the file goes to the bottom of the pile. The could even reject it and the process has to start all over.)
8. Once the lenders decision is made the transaction moves forward as normal. The lender could also reject it, and the sellers attorney will deal with that scenario and keep everyone updated.
From what you have posted it seems that the sale was not pre-approved but without the lenders approval you really don't have a contract and that you need to discuss with your attorney.
Lenders have gotten a lot faster in their response time, what used to take 90-120 days is down to a couple of weeks to a month tops, on non-pre-approved short sales. A pre-approved short sale usually has a point of contact at the lender that are assigned the case and the approval process takes 7-15 business days.
By what you have posted your agent or your attorney should be able to let you know what's going on.
I've posted a link that goes into the process in more detail. What is posted here is should not be considered legal counsel and you should discuss this matter in detail with your attororg regarding your legal rights and your agent for an updated status. Keep us posted on the developments.
Anyone looking to do a shortsale shpuld be represented by an REALTOR who had been trained and specializes in distressed properties.
The listing agent cannot cancel. Only, the seller can cancel. Do you have a signed contract by ALL parties?
If it is with a bank, the bank would be the one to cancel. Check with your agent ( buyer's agent)
Check with your attorney, also.
Contracts state that the appraisal has to be at least the sales price.
Sounds like the seller said yes but the lender hasn't replied? If the appraisal came in higher, you should expect the lender to look to that as a benchmark. You might have been in a situation where the home was listed low to attract a bid - then the short sale idea would be presented to the lender; in a sense to test the waters. Not certain why the listing agent would want to cancel.
Nonsense with short sales isn't new, there's a reason many avoid them as there is zero compulsion by the parties involved to hold to convention. I avoid them like the plague.