Home Buying in Thousand Oaks>Question Details

Dave, Home Buyer in Thousand Oaks, CA

I submitted an offer for a short sale property four months ago. About a week ago, I was notified that the

Asked by Dave, Thousand Oaks, CA Sat May 16, 2009

lender finally approved my offer and gave me about 30 days to close. However, the seller sames back off from this moment. They claimed that the bank did not waver the right to go after the seller for the difference. So the seller still has not approved it yet. Is this normal? Also, I haven't seen the formal agreement or addendum from the lender yet. The remaining time is not enough to get a loan, so I want to terminate the agreement. But my agent suggested me to hold on. I feel my agent is incapable to handle short sale. I am wondering if experts here can give me some advices on what to do next. Thanks.
Dave.

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Hi Dave,

As far as I know in shortsale the seller signs the first standard CA-RPA that he/she receives and sends it to the bank so the shortsale process began. Consequently all other offers that seller receives, the listing agent holds until the bank gives them the direction. Banks may want to see all offers or only the best ones or the first one. If the date on the shortsale addendum has expired you are not obligated to the term of the contract.

Once the bank reviews the shortsale package, they decide on the terms of the shortsale. One of which is to hold the seller responsible for the remaining balance of the loan. Apparantly the seller in your case doesnot agree with the terms of shortsale that the bank outlined for him.

The seller has decided not to go forward with this shortsale. So there is no reason for you to hang around. That is why the shortsale process is frustrating and difficult. I hope the new laws changes the way short sales are handle.

Whatever I recommended above you need to confirm with a real estate attorney.


Homa
Associate Broker
Prudential California Realty
Mission Viejo
1 vote Thank Flag Link Sat May 16, 2009
Dave
if your agent is not giving you clear answers,call his office and ask his broker if you have any obligations and the broker should be able to clarify it all, if not get a real estate attorney.
Good Luck
A.J.Zaki
3 votes Thank Flag Link Sat May 16, 2009
Hi Dave,

Lately, we see a lot of paperwork from the Short Sale banks including a clause to go after the seller and to issue a 1099-C for the cancelled debt. You should insist on submitting a CAR Form WOO if you have not opened escrow, or a Form CC to cancel the contract if already in escrow. If the agent will not do that, contact their Broker. If that does not work, the DRE has an on-line complaint form. Good luck!
1 vote Thank Flag Link Sat May 16, 2009
Hi Dave,

It will be hard to really give a good answer without seeing your purchase offer paperwork. However, I will give it a try. I have several questions. First, what time frame did you give in your initial offer with regards to the seller to respond to your offer? Second, over the course of the last four months did you sign any additional paperwork extending the time period for the bank to respond to your offer? And third, did you or your agent tell the bank that your offer is still on the table and agree to open escrow? If the original time period of your offer has expired & you nor your agent have extended the initial time period in writing and you have not conveyed that your offer is still good and escrow has not openned then I do not see the bank having grounds to hold you to your offer. If you do not feel confident that your agent is the right agent for you then by all means interview another agent. And lastly, since I have not seen your paperwork it would be a good idea to speak with a local Real Estate attorney to have them look at the purchase offer and confirm with you your rights. I would seek out that lawyer first thing Monday morning. Good luck!

Matt
1 vote Thank Flag Link Sat May 16, 2009
Hi Dave,
Unfortuantely (if it's California) the Short Sale addendum specifically states that bank approval alone does not constitute the acceptance, all parties must agree. Therefore, if the bank refused to release the seller from the balance of the lien obligation, the seller is not obligated to move forward. Hopefully, it will lead to a negotiation on this point with the eventual waiver but that will take time.
Tim
0 votes Thank Flag Link Thu Oct 8, 2009
Dave,

I think the hard part for consumers is that they know very little about what is required to get a license and what the hiring requirements are at any brokerage. Many times a consumer assumes that because a "Century21", "Prudential", "ReMax", "Keller Williams" name is associated with the agent that there is some sort of qualification or screening process before that agent is hired. Because we are a commission business the Brokers function off volume. More agents = more sales.

Quality gets the back seat all the time. Look at "Sotheby's" supposed to be a brand for high end listings yet you see their signs in front of dumps all the time. Most brokers will compromise their mission statement to increase volume so this is why it is extremely important to interview agents.
Web Reference: http://www.homebuysblog.com
0 votes Thank Flag Link Mon May 18, 2009
I want to thank everyone who replied to my question. Homa, your answer is especially helpful for me to figure out what I should do next. Ted, thank you very much for spending time on making the youtube video. I felt you might be right. I should have been more careful and spent more time on evaluating the agent before I jumped into a short sale. I wasted probably the most valuable period and missed several good deals in the past several months. Also, I do have some feelings that maybe the seller was not even serious about the short sale, or for some reasons that I don't know. I hope my experience can help other buyers fully aware the drawbacks of a short sale and be cautious on what a short sale agent might promise you. Thank everyone for following this thread.

Dave.
0 votes Thank Flag Link Sun May 17, 2009
Dave,

I posted my answer on YouTube. http://www.youtube.com/watch?v=jV4OmcXffVI
Web Reference: http://www.homebuysblog.com
0 votes Thank Flag Link Sat May 16, 2009
Matt,

Thanks for your response. The purchase agreement was a standard CA residential purchase agreement plus one short sale addendum. On the original addendum, item A - short sale approval: "This agreement is contingent upon seller's receipt of written consent from all existing secured lenders and lien-holders, no later than 5:00 Pm on April 3, 2009, ....". The seller signed on the agreement. However, the lender was extremely slow. On March 10, I was told that lender began to process my case and decision would be made within 60 days. Before April 3, I was asked to fill another short scale addendum to extend the expiration date to April 30. Two days later, my agent told me that lender did not require to extend the expiration date so my original agreement was still considered as valid by the lender. However, to avoid any unnecessary problems, I still sent my agent the revised addendum with expiration date postponed to April 30. I was notified on May 10, the lender approved my offer. But the seller has not approved it yet. Does the seller need to approve the sale twice? Also, because of my offer, the lender postponed the auction date so the seller could stay in the property for longer time. My agent told me that I had no obligations to the deal but still suggested me to hold on it for any changes. I was quite confused right now. Should I withdraw my offer and let the bank foreclose the seller or hang around for nothing but postponing lender's auction?

Thanks

Dave
0 votes Thank Flag Link Sat May 16, 2009
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