Can I back out from short sale after I made offer and deposited 2 months ago?

Asked by Vince T, San Jose, CA Sun May 22, 2011

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12
Tni LeBlanc, Agent, Santa Maria, CA
Sun May 22, 2011
It depends on what your contract says. Have you had your attorney and real estate agent review it? It will all depend on what the contract says on its face. Many short sale sellers are requesting stiffer penalties for buyers who back out because it costs them time and effort with their lender. But it will all depend on what you agreed to at the beginning of the process.
3 votes
Andrea Wince…, Agent, Milpitas, CA
Sun May 22, 2011
Hi Vince, the agent who wrote your offer (your buyers agent) should be helping you with this issue because they wrote the contract and know what it says. You are bound by the terms of your contract and all of it's addendums. Your agent should have already provided you a copy of everything that you signed. I am surprised to see that you put down a deposit already. We can stipulate in the contract that the buyer does not have to deliver deposit until we have short sale approval letter from the sellers lender. But like said, it all depends upon what you agreed to from the beginning so you may have trouble getting your deposit back, that is unless you have a really good reason for changing your mind such as loan contingency, and now you can't get a loan?. Consult the agent who wrote your offer.
2 votes
Virginia Tho…, , Cupertino, CA
Sun May 22, 2011
Vince,
You haven't actually stated where you are in the short sale process but I'm guessing you're at the sit and wait stage in hearing from the bank on your offer.

As others have stated look at your Short Sale Addendum and check the number of days that were entered by your realtor for the bank to review your offer. In a short sale it's likely 90 days. If the bank has not communicated with your realtor about the offer, let your realtor know that you want to withdraw your offer. Your realtor should have been giving you weekly updates at the least on what the bank negotiations have been. From the vague information you've given, it doesn't appear this offer has moved beyond submitting it to the bank. Therefore, ask your realtor to return your deposit checks.

Get your realtor to answer your questions that's why you hired him. If you're not getting satisfactory answers go to his broker.
1 vote
Robert Lei, Agent, Cupertino, CA
Mon Aug 13, 2012
Just ask your agent to withdraw your offer and to destroy or give back your deposit check.
0 votes
Denise A. Sz…, , San Jose, CA
Sun May 22, 2011
I am sure your agent told you this should be a long process, some buyers tend to forget I fear. But until the lender sends you a written approval your deposit should not have been sent to escrow or deposited yet, your contingency period has not yet started. You should have signed a short sell addendum giving the bank up to 45 days to respond with all the legalities spelled out for you. With in that time you may back out and/or if the bank has not responded you may back out. Short sells can be a long process, especially if the bank has not approved the listing price which I might add should not be listed at a low unsubstantiated price. But lets go further and say they had an appraisal done and listed at a fair market value. If the seller is so upside down it will be a long shot. I hope the bank works with your offer. If your agent did a CMA for you and the price you offered was fair, close to what the sellers owes you may have a good chance at it, the second always is a scratcher. They could agree on a reduced amount or just say no. If the seller owes so much more than the property is worth it may go to bank owned. A lot of if's with that said if it is worth the wait and you have a good chance purchasing a property at a value go for it, but you still can look.
Good luck~
0 votes
John Juarez, Agent, Fremont, CA
Sun May 22, 2011
Vince,

Welcome To the wacky world of short sales. Did your agent not tell you at the outset that short sales take a long time? If not, bad on him/her. If your goal is to buy a house and this house meets your needs why would you cancel out? Canceling this sale and starting over will not really save you any time. I understand the frustration of sitting and waiting for the lenders to make a decision but your Realtor should have a strategy for pursuing other houses during your waiting time. I know some people think you are out of the market once your agreement to purchase a short sale has been accepted by the seller but the offer is still contingent upon approval by the lender(s). If the banks got their acts together and provided approvals on short sales within a reasonable time period we would not have situations like you are in now.
0 votes
Ruth and Per…, Agent, Los Gatos, CA
Sun May 22, 2011
Yes absolutely, if the second lender has not approved and contingencies are not removed you can.
Hopefully, you did sign a CAR form and Short Sale addendum.

Good luck.
Perry
0 votes
Terri Vellios, Agent, Campbell, CA
Sun May 22, 2011
Your contract and your agent have those answers. I know two months is a long time but not in the short sale world, when I work with my buyers explain to them before entering into the contract to be prepared for up to 6 months or perhaps short sales are not for them.

Good luck.
Web Reference:  http://www.terrivellios.com
0 votes
Vince T, Home Buyer, San Jose, CA
Sun May 22, 2011
the lenders has not approved the sale yet. I am still waiting on 2nd loan approval. It just takes so long and I don't want to wait anymore. I just wrote the check deposit but it's not cashed out.

Thanks,
Vince
0 votes
Bruce Scheer, Agent, San Jose, CA
Sun May 22, 2011
When you wrote the offer your agent would have included a short sale addendum with a time limit for the bank to approve the sale. If that time has come and gone and the bank has not yet approved the sales price and terms in your offer then you can back out. Additionally, if you still have contingencies for inspections, disclosures, loan, appraisal and other caveats that have not been removed by you in writing then you can back out via one or more of those contingencies.

You may have other options as well. Talk with your realtor.
0 votes
April Tavares, Agent, Campbell, CA
Sun May 22, 2011
Hi Vince,

What does your short sale addendum say. If you take a look at paragraph, 1 A of that addenudm, it will state the length of time the seller has to get short sale approval. The contract starndard is 45 days, but the amount of time is negotiable. Take a look at what was agreed to in that addendum. You may be able to cancel the contract based on the Seller not providing you with confirmation of short sale approval by the lender or lenders.

You really need to direct this question to your Realtor as they will have the details surrounding your contract and agreement.

All the best,
April Tavares, GRI, ASP
REALTOR, DRE License #01742179
Santa Clara County Market Reports: http://april.rereport.com
Web Reference:  http://www.AprilTavares.com
0 votes
Michele Lane, , San Jose, CA
Sun May 22, 2011
This is a good time to talk to your Realtor. It is not when you wrote the offer it is when your contingency time periods are up. Has the lender approved the sale? If not, you should be able to withdraw your offer. If the bank has approved the offer, are you still in your contingency time period and why do you want to withdraw?

You can always withdraw an offer, no matter when, but it could cost you your deposit. Depending on timing and reasoning.
0 votes
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