Home Buying in Los Angeles>Question Details

Ann Guyer, Home Buyer in Los Angeles, CA

Need advice on being stuck with a short sale offer.

Asked by Ann Guyer, Los Angeles, CA Thu Feb 12, 2009

If i put an offer in on a house that is a short sale, and months later I still haven't received a reply, and i find another house. What happens if the bank accepts my first offer? Am I stuck with that one?

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Dear Ann,

First and foremost there are a few things I need to ask you. Sometimes when a short sale has been accepted by the seller, escrow is opened. Sometimes, it is not. Did your agent put your check into escrow or did he/she keep the check with his/her broker? With short sales, they do take a long time depending on the lender. So, at any point, you can withdraw your offer and cancel. Have your agent do a cancellation form. Also, did you sign a short sale addendum? A date that you were willing to wait should have been put on there. Check to see what date is on that form as well if your agent completed that form. You should be able to get out of the short sale. It happens all the time. Buyers get frustrated waiting for the lender to approve them and move on.

If I were you, I would look for regular sales or bank REO's (real estate owned). They are much quicker to respond because they have already been foreclosed on and the banks want to get them off their books.

Good luck to you Ann!

Kind regards,

Joan Patterson, B.A., A.S.P., G.R.I., Realtor
Keller Williams Realty
8250 White Oak Avenue, Ste 102
Rancho Cucamonga, CA 91730
1 vote Thank Flag Link Fri Feb 13, 2009

This depends on the terms of your contract.. First if you have an addendum or clause in the contract, "Subject to lean holder or Short Sale approval". You can with draw your offer.. because the lender has not approved the offer yet.. If this clause is not in your contract, I would consult a Real Estate attorney and have him look over your contract to see if you have any way out..

Good Luck,
Annette Thornhill
Homestead Realty
Smith Mountain Lake, VA
0 votes Thank Flag Link Fri Feb 13, 2009
Your agent has to notify the listing agent that the offer is being with drawn, so they can notify the bank.
0 votes Thank Flag Link Fri Feb 13, 2009
Hi Ann,
You should ask yourself a few questions: Did you or your agent write out the offer on a C.A.R. standart form with the short sale addendum? When you present an offer it usually has an experation date. Did that past already? If not, you should have your agent cancel your offer in writing. There is a cancellation form for that.
Did you deposit your check into escrow already? If yes, give a copy of the cancellation notice to escorw and have escrow write out a cancellation notice as well to you and to the lender. Both, the lender and you have to sign this cancellation notice. Talk to your agent/broker and if necessary to a real estate attorney.

Best of luck,

Tova Sarir
Keller Williams Realty Beverly Hills
Web Reference: http://www.tovasarir.com
0 votes Thank Flag Link Fri Feb 13, 2009

Without examining your offer it is not possible to say what your exact situation is. In any case the best person to answer your question is an attorney who specializes in real estate contracts. However, here are some tips which generally apply in a short sale situation. Please note that these may not apply in all cases. Moreover it is not to be construed as legal advice for only an attorney can give that.

1. A short sale offer has not been accepted unless it has been signed by both the Seller and the Seller's lender. If there is any change in the terms and conditions that you wrote in your offer (including changes in escrow period, deposit amount, purchase price, title and escrow companies, etc.), it then becomes a new offer from the Seller/lender to you. You now have an option to accept, reject or counter back with revised terms.

2. Your initial offer should have an expiration date for acceptance. If it does, and the lender's acceptance has come after this date it is entirely up to you whether you want to accept the offer or not.

3. Assuming that the lender's acceptance was conveyed to you within the expiration date of your offer, your recourse now to get out of the transaction depends on the type and nature of the contingencies you had specified in the offer. Some of these contingencies may or may not have a "right to cure" by the Seller and/or lender.

My suggestion is to first talk to your Agent and perhaps the Agent's Broker. It may also be necessary to discuss your situation with an attorney.

Best Wishes,

Bob Khalsa
Broker Owner
United America Realty
0 votes Thank Flag Link Fri Feb 13, 2009

Notify the seller's agent in writing that you are formally withdrawing your offer on the property because of what you feel is an excessive delay. Your offer can be withdrawn any time before it is accepted.

Good luck
0 votes Thank Flag Link Fri Feb 13, 2009
I would first cancel my existing offer on the Short-Sale, in writing, to the listing agent by your Realtor/Agent. Your offer, if written as per California Assoc. of Realtors guidelines, does not make the acceptance by the Lender a trigger to force you to go through with the sale. Usually the contracts have an expiration date and/or allow your timeframe for inspections to begin upon lender approval of the short-sale. This is but one condition of the sale not THE condition, thought without it you won't be able to close the transaction. I assume you have an escrow open with deposit check IN escrow? And PLEASE don't make the mistake and have your agent tell the listing agent, "oh we'll just back out when we due our physical inspections." WRONG!! This won't hold up in court and you'll certainly loose your deposit. Go through the inspection process and then beg off, in writing, due to condition of the property. But don't tip your hand to the listing agent as this is simply not bargaining in good faith. If your agent is vague or not experienced, he should have warned you about the folley of a short-sale, contact an attorney and proceed from there.
0 votes Thank Flag Link Thu Feb 12, 2009
RULE OF THUMB if its been months MOVE ON , bank would have accepted the offer by now. GREAT QUESTION
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Thu Feb 12, 2009
Did you put in an expiration clause in you contract? Is it inspection or mortgage contingent? These are your outs. Exercise them!
0 votes Thank Flag Link Thu Feb 12, 2009
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