Short Sale fell through - do we get our deposit back?

Asked by Chris, Simi Valley, CA Sun Dec 28, 2008

Here's the story--bid on a short sale home three months ago. Just found out in Dec. 08 the lender approved it BUT the actual letter of approval was not given to us to give our lender until 8 days after approval was supposedly given. So, now were on the last day when it should be funded per the short sale approval letter. We're not sure it's going to make it. My question is--if monies are not funded in time, therefore canceling the short sale agreement, do we get our deposit back? It seems that 8 days would have been critical for us to get everything done in time. Not sure who really is the blame--there are a lot of other issue with this particular sale as well. Also, we have not removed all contingencies.

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Ted Mackel, Agent, Simi Valley, CA
Mon Dec 29, 2008

No matter how great your lender is, you need certain assurances to fund a loan fast. I have had two transactions in the last 90 days where the money line was frozen on the lender ( I was the listing agent on both transactions). The lender had to repackage the loan and get funding with a new money source. Best scenario from submitting a complete package to funding was 5 business days on both. If your appraisal is 90 days old that could cause even more delay.

8 days is a big roll of the dice with a deposit on the line.

As far as your deposit. Check you contract language and any addenda you may have signed. Check all escrow instructions and amendments. You will still need the Seller to cancel escrow, before the money can be released.
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Dallas Texas, Agent, Dallas, TN
Sun Dec 28, 2008
Ask your buyers agent amended sales offer contract. There could be in executed contract regarding # of days past projected close date if closing does not happen on date scheduled.
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Jillian Mason, Agent, Monroe, NJ
Sun Dec 28, 2008
Yes, you will get your deposit back. As the others said, if you like the home and would like to proceed you should be able to easily get an extension-especially if you're the only bidder for the property. Good luck!

Jillian Mason
Direct: 732-586-5488
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Isaac Bensus…, , 92037
Sun Dec 28, 2008
Are you buying the property without a Real Estate agent? If you have an agent as I believe you must have, I am sure he or she can talk or he or she is already talking to the Short Sale's Listing Agent and arranging for a 10 or 15 days extension on the closing.
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Larry Watson, Agent, Moorpark, CA
Sun Dec 28, 2008
Hi Chris, From the explanation you gave on your deal you should get your deposit back. According to the CAR contract you would have 17 days before removal any contingencies. Why not ask escrow to get an extension on the short pay approval and continue to close on your purchase. Like with most short sales there are a lot of issues, its is imperative that the escrow company as well as the agents(on both sides)are well versed and work closely together to close the deal. I hope this helps, please remember without the full details of the situation it is hard to determine but based on the time lines you have indicated you should get your deposit. If you are still within the 17 days per the CAR contract and you do not want to continue with the deal, have your agent cancel the contract on the appropriate CAR form.
Sincerely, Larry Watson
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