after making an offer on a shortsale & owner signing the contract, do I need 2 request an extension or am I still good with my previus contrac?

Asked by Mpet75, Bradenton, FL Tue Mar 9, 2010

On Jan 11 I made an offer on a shortsale condo that was being announced as "approved short-sale", however, the date we signed on the contract to close expired a few days ago. Do we need to request an extension in order for the bank to continue acknowledging our offer, or are we still good with our original offer/contract? Last we heard was that an appraisal had been done a week ago.

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12
Mott Marvin…, Agent, Sunny Isles Beach, FL
Thu Mar 11, 2010
The short sale addendum should address this concern. Usually, you do not need an extension- as the lender has time to respond to the offer and that is taken into consideration. Unless you plan on backing out of the contract- no written addendum is needed. Follow up with the people handling the short sale to get the latest news.

♥.•*¨`*•♫.
≈≈≈ Mott Marvin Kornicki, REALTOR® ≈≈≈
Aventura | Bal Harbour | Sunny Isles Beach
≈≈≈≈≈≈ "★” This is the House “★" ≈≈≈≈≈≈
1 vote
trulia, , Anna Maria, FL
Tue Mar 9, 2010
I always have my customers sign an addendum extending the lender approval deadline; otherwise the listing technically should be placed back in MLS as an active listing. What is your Realtor advising you to do? MLS rules vary; your Realtor should know the best way to proceed to protect your interest in the property and not violate MLS rules.
1 vote
The Monson C…, , Portland, OR
Tue Mar 9, 2010
This is a question for your Realtor, but it sounds like you should get an extension of your closing date so you remain in contract.
1 vote
Debra B Albe…, Agent, Port St Lucie, FL
Thu Mar 11, 2010
Let me add to Mott's answer. The effective date of the contract is when the bank approves it. If you want to make sure you are covered, look at your short sale addendum in the contract. It will give the days that the bank has to answer. If this is the time that is run out, you can extend that time with an addendum, just to make sure you have everything tied up. Hope this helps you.

Debbie Albert
Coldwell Banker Residential
0 votes
trulia, , Anna Maria, FL
Wed Mar 10, 2010
Hello again...
There is no way for any of us to answer your question without reading your contract and short sale addendum. The short sale addendum I use states..."If such lender acceptance and approval of the sontract and settlement statement are not received prior to 5:00pm on __________(approval deadline), then this contract shall automatically terminate, whereupon Buyer shall receive the return of Buyers deposit and the parties shall have no further liability to each other....." it goes on with additional language.

If the contract automatically terminates then someone else could submit an offer. If you extend you resecure your contract. In my experience the lender has continued to "work the file" regardless of the termination date, however lenders are unpredictable!

Refer to your contract, consult your Realtor & express your concerns. Good luck!
0 votes
Debra B Albe…, Agent, Port St Lucie, FL
Tue Mar 9, 2010
Michelle,

I liked your answer and wanted to share something that we do with you. On our short sale addendum we make two changes. We make the 45 day a 90 day...AND...we change the seller "May" to seller "may not" continue to market the property.

In the first instance, we want to make sure that the buyer KNOWS that Short sale is in name only...and not the time it takes to get the deal done. In the second instance, we want to make sure the bank doesn't sit and wait for a better offer. (A back up offer is OK). As I am sure we all agree, if you have an approved price, where the buyer walked. That is the easiest and fastest.

Jezz...It used to be that Sale was one of my favorite words!

Now, there are some recent changes to short sales that are positive, I hope we all start having a better time of getting these approved and closed. We had, just today, a second mortgage approval and are on our way to close...wish you the best too!

Debbie Albert
Coldwell Banker Residential
0 votes
Mpet75, Home Buyer, Bradenton, FL
Tue Mar 9, 2010
Thank you all for your answers.
0 votes
Robin Coons…, , Phoenix, AZ
Tue Mar 9, 2010
It is always safer to sign an extension. Remember these are contracts and unfortunately the lenders don't seem to be aware of the element of time.
0 votes
NA, , Bradenton, FL
Tue Mar 9, 2010
Your contract is valid until the 45 Short Sale Addendum period is up. In your case, based on your offer of January 11th, if it is assumed the sellers also signed and accepted your offer on that date then your addendum expires next week around the 17th or 18th. If the sellers did not sign and date your offer on the 11th, than you will count 45 business days, excluding holidays, to find out when the addendum needs to be extended. The dates on the contract, not the addendum, are the date you ask to close by (page 1 of the contract bottom paragraph), and the date you are giving the seller to respond to the offer (page 8 of the contract top section). When your addendum is expired next week, I would have a new one drafted if you wish to give the bank another period to review your offer. The agent working on your behalf should know that this addendum is set to expire and be in constant contact with the listing agent to understand if approval will be obtained by the lien holders before next week.

I suggest you pull your copy of the contract and review the signature date of the sellers, along with all other dates on the contract and your short sale addendum. Then you should discuss it with your agent.

I hope this assist you.
Best of luck

Michelle Niemczyk, Realtor
Coldwell Banker Residential
813-260-0585
michelle.niemczyk@floridamoves.com
0 votes
Debra B Albe…, Agent, Port St Lucie, FL
Tue Mar 9, 2010
You do not need an extension because you are not out of contract or in danger of becoming out of contract. Short sale contracts are signed by both parties and then sent to the bank for approval. The bank approval date is the EFFECTIVE Date of the contract. In a purchase and sale contract that is not a short sale, the effective date is the date the last signatures are done and all initials are done. So technically even though your short sale contract is signed by buyer AND seller, it is an offer that the bank is considering. We certainly wish you well on this road, it takes patience.
I hope I made that more clear for you.

Debbie Albert
Coldwell Banker Residential
0 votes
Mpet75, Home Buyer, Bradenton, FL
Tue Mar 9, 2010
my realtor thinks is not necessary to ask for an extension, that is why I'm asking here. i want to make sure I'll still get an answer from the bank on my offer wheather I sign an extension or not. So in your experience, do banks still answer your clients' offers even if the date of the contract was expired, or do you always ask your future home buyers to renew an extension?
0 votes
Debra B Albe…, Agent, Port St Lucie, FL
Tue Mar 9, 2010
Mpet,
This is a Great Question. The contract is signed by both parties, however, on your short sale addendum to the contract, the effective date...the date that the contract becomes a contract is when the bank approves the short sale. On that date, your contract date limits kick in. Your date for loan commitment, your date to get the property inspected, your 30 days till closing (that is pretty standard) all start counting on the date that the lender approves the sale.

Hope this helps!
Debbie Albert
Coldwell Banker Residential
Web Reference:  http://www.ronanddebbie.net
0 votes
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