deposit for short sale

Asked by Hollie, Tracy, CA Mon Oct 21, 2013

When do I need to give the deposit of $12k to title company? After or before the bank approve the short sale ?

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8
Pacita Dimac…, Agent, Oakland, CA
Mon Oct 21, 2013
It all depends on your agreement, and if this is a competitive situation.

In several of my short sale listings that had competitive offers, one of the things that set the buyers apart is their willingness to open escrow upon acceptance of the offer by the seller, and pending approval by the short sale bank. The reason for this is that it show how serious the buyers are, how willing they are to commit to the waiting period.

It is not unusual for buyers of short sales to back out of the agreement if they don't want to wait much longer than 45 days to receive short sale approval. When they do that, the short sale process starts all over again, which is frustrating for both seller and the listing agent.

There are no guarantees as to how long it will take to receive short sale approval. The listing agent and seller will likely want to have a longer waiting period beyond the standard 45 days on the short sale purchase addendum. Furthermore, as show of good faith, they would want the buyer to open escrow upon acceptance of offer. Then both buyer and seller wait together.

If the buyer isn't willing to wait, or to open escrow, especially in a competitive situation, then the buyer is writing a weak offer from the seller's and the listing agent's perspective.
1 vote
they don't want to wait much longer than 45 days :

Based on short sale addendum, buyers only need to wait 45 days. So even buyers open escrow upon acceptance of offer, they still can cancel the contract after 45 days if no approval from banks. But if the seller doesn't sign the release form, the buyer won't get the deposit.
Flag Mon Oct 21, 2013
Kawain Payne, Agent, Seal Beach, CA
Fri Oct 25, 2013
Hell Hollie,

I suggest you have your deposit check held UNCASHED by your agent/ escrow until seller provides you with written proof of SS approval..

Much success to you!!

Kawain Payne, Realtor
0 votes
Hollie, Home Buyer, Tracy, CA
Mon Oct 21, 2013
Thank you all.
If I submit the deposit to title company, I can't back out before the short sale has been approved. Am I right?
0 votes
Thanks, Pacita
1. 45days
3. 5days
Flag Mon Oct 21, 2013
Remember that you have timelines.......
1. How many days did you say you are going to wait for short sale approval? The standard period on the purchase agreement is 45 days. What did you choose to do?
2. And once you receive short sale approval, the escrow timeline starts.
3. You have buyer inspection contingency --- how many days?
4. If you're getting a loan, you also have loan appraisal and loan approval contingency.

If you don't clear or sign off on all the contingencies, even after receipt of short sale approval, you can back out.

What is your own realtor telling you? Shouldn't you ask him/her these questions?

3.
Flag Mon Oct 21, 2013
Lubna Sheikh, Agent, Fremont, CA
Mon Oct 21, 2013
I would only deposit if your offer is accepted .....check with your realtor
0 votes
JR Thrasher, Agent, San Diego, CA
Mon Oct 21, 2013
After.

Talk to the contractor that did the work. See if they are licensed.
0 votes
Walter 'Skip'…, Agent, Brea, CA
Mon Oct 21, 2013
I always recommend after but look at the Short Sale Adendum form (if used) and see what you agreed to.
Good luck,
0 votes
Alexander Gr…, Agent, San Jose, CA
Mon Oct 21, 2013
After.

Alex Greer
Loan Officer
NMLS #1056079
http://www.TheMortgageOutlet.com

408-352-5147
AGreer@TheMortgageOutlet.com
0 votes
Brian Ripp, Agent, Fremont, CA
Mon Oct 21, 2013
If you, &/or your agent, used the CAR form for short sales, it states on that form whether or not you will deposit the deposit money in to the escrow account.

If you have not signed any paperwork at this time and are asking for opinions, my opinion is: not to place your deposit money into escrow until the sellers bank has approved the short sale.

Good luck,
Brian
0 votes
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