Can the seller of a short sale make a deal with the buyer about closing time?

Asked by negritabf, 06468 Tue Oct 16, 2012

I recently put an offer for a Short sale, I offer over asking price with a conventional loan. I was informed that there was 1 higger offer FHA loan, that offer was accepted by the seller. I was told that the seller and the prospect buyer have an agreement to close in 6 months so the seller can stay in the house longer. What can I do since I do not think that is fare to me. I did not get my offer presented to the bank because I do not know the seller and I do not make a "deal" with the seller. Seller know I am ready to close in 3 weeks tops, that means seller needs to move out sooner... is that legal? besides that I know that in this case seller and prospect buyer are close friends, that is why they make things work for eachother... not fare to me!

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The Medford…, Agent, Fremont, CA
Thu Oct 18, 2012
One of the problems we face in Real Estate is the idea that things should be “fair.” Whatever that means. In reality, the world we live in is not fair and real estate isn’t either. As an example, I have over a dozen young couples trying to get into their first home – they’ve waited patiently for the market to hit bottom, have worked on getting their credit scores in line, have saved up down payments, are pre-approved (many are FHA) … and then are getting blown out of the water time-after-time in multiple offer situations homes by cash investors who are then offering those very same homes back to the very individuals who wanted to buy them … as rentals. Does that sound fair? Whatever you decide, it’s very, very real.

A seller can choose to sell to whomever they wish for any reason they wish at any time they wish so long as they do not violate fair housing discrimination rules. They can choose the lowest offer, a cash offer, an offer that closes in 3 months, an AS-IS offer, their friends offer … and so on – and they don’t even have to explain to you why they chose the deal they did. Doesn’t feel fair? It’s because it’s not.

It never was and never will be. As for legal? Totally.
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Pacita Dimac…, Agent, Oakland, CA
Tue Oct 16, 2012
Your agent, if he is seasoned and experienced about short sales should have explained this to you.

Regardless of whether or not you can close escrow sooner is not the issue here. Short sales will take longer to process -- and it's not a matter of the owner staying longer at the house. It's when the seller's lender approves the short sale price, terms and conditions.

The seller can choose whichever offer he wants, especially one that has the best chances of being approved by the lender --- and sometimes, those chances are vastly improved when the offer is the highest. That's because the bank would want to get the highest possible offer since the bank would want to recoup as much of its investment as possible in a property that is being sold for less than what is owed on it.

So it's not a matter of the seller being friends with the buyer.....or that you can close in 3 weeks ....

But please discuss this with your agent. If he is not knowledgeable about these matters, perhaps you should get another agent who can better help you and explain what a short sale entails.
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Scott Godzyk, Agent, Manchester, NH
Tue Oct 16, 2012
First thing is this, the SELLERS BANK will choose and demand when they can close. The sellers bank will not want to wait 6 months. The sellers banks usually mandates a 30 day move out from approval and has the buyer and seller sign a form the seller is out.
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Bernard Gibb…, Agent, Danville, CA
Tue Oct 16, 2012
The seller is the person on Title, not the lender. The seller can therefore accept any offer he wishes, although it will be "subject to lender approval" in the case of a short sale. This offer (and only this offer) would then be submitted to the lender who may decide to approve, disapprove or approve with additional conditions.

What is "fair" does not enter in to it. Six months closing would be unlikely to be accepted by the lender in my opinion, though.
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Walter 'Skip'…, Agent, Brea, CA
Tue Oct 16, 2012
Even though the seller agreed to a 6 month close of escrow, the shorted lender will need to approve the transaction. I have never seen where a shorted lender will agree to such a timeframe. Looks like the seller is not all that interested in selling.
Good luck,
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De Vonte Wil…, Agent, East Point, GA
Tue Oct 16, 2012
Good Morning. Yes the Seller can set a projected closing time frame with the purchaser, though it may not actually close in that time frame because they may still have to wait on the bank to approve the Short Sale. If you wish, you can consult with an attorney.

I hope this answered your question! If you have any further questions, please feel free to contact me by the ways below.

Wishing you the best of luck,

De Vonte Williamson
Licensed Real Estate Salesperson
Proudly Serving Long Island
Coldwell Banker Residential
Mobile: (631)384-3695
"I Stand Behind Getting You Results!
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Don Tepper, Agent, Burke, VA
Tue Oct 16, 2012
Yes, it's legal.

You keep asking the same question over and over and over.

Get it through your head: It's legal. The other buyer presented a more attractive offer. It was more attractive because the seller wanted to stay in the house longer.

As for buyer and seller being close friends: So? You're right: As friends, they worked out a deal that made the most sense for the two of them.

Is it fair? Absolutely. You could have made an offer similar to the other buyer's. You didn't.

Next time, work harder to keep the seller's motivation and desires in mind.

Hope that helps.
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