I am in the process of buying a home on short sale. The realtors told us that the bank has set the sales

Asked by Diana, Buffalo, NY Mon Oct 13, 2008

price for the house and we went into contract with the owner and the realtors asked us to put down 20% w,c we did. The contract states that the closing may take place on or before Oct 20,2008. Recently the agent states that the bank looks like they are changing their minds after they got the appraisal.My concern is since contract states that time is of the essence and I may not fulfill ceratain requirements like doing a tiltlle search and getting a home insurance policy in time for the designated closing date since I am not definite if we are getting the house as the realtor has no answer for me yet. If the bank decides with in short notice am I entitled to an extension of closing date to get everything I need ready or can they turn around and say we are in default?

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terryriw53, Agent, Sewell, NJ
Mon Oct 13, 2008
You need to contact your attorney and get the legal answers from them. Based on experience, each short sale is unique and what holds true in one case may not hold true in another. I'm not surprised that you agent has no answers, and it isn't because of anything they did or didin't do. The bank is going to do what is in their best interest. But, if the bank is serious about going to closing, they will allow extensions to the closing date because it is in their best interest to make sure that all the steps are followed.
Web Reference:  http://www.terryi.com
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Carol Ruffu, Agent, Northfield, NJ
Wed Jun 24, 2009
I have done several Short Sales in New Jersey. I have found that most banks will work with a qualified buyer and allow extensions with in reason, however if someone else comes along with a higher offer you are at risk of not getting the property. I have also been in situations where the sellers bank approved our offer and when the buyers lender had an appraisal done it came in for less than the offer and the sellers bank still settled for the lower price on the lower appraisal.
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Larry Sarlo, Agent, North Wildwood, NJ
Tue Oct 14, 2008
I have made a few personal short sales transactions in the last 15 years. It was not until the last 6 months most people even heard of them and all of a sudden it has become watercooler talk with so many who think they know about them. Short Sale has become part of everyones vocabulary. The many short sales I was involved that never made it to the table was due to many variable situations, many of which were due to negotiations with the bank. Since the bank is now part of your transaction, they are holding the cards to acceptance or rejection of the offer you have. My question is, why is the agent stating the bank may be changing their minds? If an appraisal came in much more than the sales price and the bank feels the sale is not within their scope of allowance there is still room for negotiation. But I would be very concerned about making additional counters.. The bank will more than likely make a counter if this is the case. Since a short sale offer is exactly that there is no acceptance until the bank makes the final decision. Getting to that decision is the long haul wait. Mostly due to a final decision makers not availble at the bank and their reluctance to make decisions quickly, unless it has been on the table before, they will wait it out to get additonal offers since they can continue to accept offers until they signed the acceptance(their back door). You need back doors as well. My advise, is the same with many others here... Get yourself an attorney. Obviously you need legal advise, especially now after the fact. Every short sale is unique and your contracts, if just the standard short sale contracts, need adendums to protect you as well,. I have seen clients literally in tears because they lost their negotiation battle after a long struggle of several offers and counters and still losing the sale. These are transactions that require some thick skin, unemotional, processes. "Sometimes you gotta know when to fold'em " Seek an attorney for your own protection, you need someone on your side. You apparently are not informed on short sales and your particular contract . Good Luck!
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Scott Godzyk, Agent, Manchester, NH
Tue Oct 14, 2008
Usually in a short sale the bank does not set a price up front, that is done by the broker. the bank assesses two things, whether the seller is in a fincial position to warrant a short sale and how much the bank will receive in a short sale versus what they will receive in a foreclosure. Normally you want the short sale price to be 12 to 20% of the mortgage owed to be within what the bank will accept. unfortanately the bank holds all the puppet strings. In a short sale you there are diferent disclosures that brokers or the banks themselves have come up with making you wait for ever and with nothing holding the bank to agreeing to anything to the last minute. You do really need an attorney to review what you have signed. this should have been done before signing so you knew what you were getting into. I havent seen one short sale close on time, so you are not alone. once the bank does gove an approval it usually takes 14-21 days to close anyway, so chances are you would get an extension as teh bank needs it as well. good luck with working it out.
Web Reference:  http://www.ScottSellsNH.com
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John Sacktig, Agent, New Jersey, NJ
Tue Oct 14, 2008
This one is for all the people that post about how you do not need an attorney closing your purchase or sale.

Sounds like you need to speak to an attorney if you do not have one.
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Laura Gianno…, Agent, Manahawkin, NJ
Tue Oct 14, 2008
Usually in Atlantic County, Title companies handle the closing so you probably don't have an attorney. As stated previously, you might want to get one for this final phase of your negotiations. A Title search and home owners insurance does not take that long to do.

I doubt at this late date the bank is going to set the closing for 10/20. In the short sales I've done, the bank will give you enough time to complete these items. I would suggest you line them up now, so the Title Company and insurance provider are aware of your possible time constraints and will be able to hit the ground running once you get bank approval.

To speed the Title work, have your agent contact the sellers agent and find out which company did the previous title work. Having that information available makes the seach much easier.

Good Luck!

Laura Giannotta
Keller Williams Atlantic Shore
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Sharon Kozinn, Agent, Hillsdale, NJ
Mon Oct 13, 2008
Dear Diana,
If you don't have a real estate attorney, now is the time to get one. They will be able to tell you your rights and responsibilities under your contract.

Good Luck.
Sharon Kozinn
Web Reference:  http://sharonkozinn.com
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