Can a short sale seller cancel the sale after lender has approved, offer is accpeted and escrow is open? (buyer has given deposit to escrow)

Asked by Cpi, Los Angeles, CA Sun Aug 21, 2011

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9
Shanna Rogers, Agent, Murrieta, CA
Sun Aug 21, 2011
Hi Cpi,

Review the RPA and SSA (and any additional ADMs, etc) signed by all parties to see reasons seller can cancel without being in breach of contract. Also, since you are a Broker, contact C.A.R. Legal tomorrow morning as you get free legal from them.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
2 votes
skim, , New York
Wed May 16, 2012
Seller can cancel. It sucks because the buyer can only sue for out of pocket expense. To go after the seller for "Specific Performance" is futile and costly. There's nothing the buyer can do or be compensated for the lost time and agony. Sellers today are taking advantage of realtors and the system in hopes of delaying foreclosure. It's a silly game that's becoming more prevalent everywhere. This is one of the reasons why I steer my clients away from shortsales that are occupied by the owner. Vacant shortsales are good.
0 votes
Kawain Payne, Agent, Seal Beach, CA
Tue May 15, 2012
Why would the seller want to cancel the sale? You may need to contact an attorney. This sounds complicated.

Best of Luck to You.

Kawain Payne, Realtor
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Aug 23, 2011
I know how it feels:
I had a Shortsale listed, and my Client called me in; He had a proposal from one of those companies: They promised him to save the house by forcing the Bank to modify the Loan.

I cautioned him to not give them any money up front. He ignored my and gave them $1500, I cancelled the Listing and removed my sign. He told me a month later that it was all a scam. No apology, no Listing, no Sale. The Bank Foreclosed.

Every night, I go to bed, and I pray for a Client who will LISTEN to me.
0 votes
Steven Ornel…, Agent, Fremont, CA
Tue Aug 23, 2011
Cpi:

I believe Shanna has provided the best advice on this one - call the CAR Lawyers. Theoretically, once the Seller stops meeting their contractual requirements (i.e. producing disclosures, etc.) the Buyer could send a (or series of) Notice to Seller to Perform (CAR Form NSP) and even a Demand to Close Escrow (CAR Form DCE).

In reality, I suppose the outcome of this issue will rest on how determined the Buyers are to take possession of the property; and conversely, how much the Sellers want to keep their property. Sometimes emotion trumps logic.

Best, Steve
0 votes
Eli Givoni-S…, , Boca Raton, FL
Sun Aug 21, 2011
A lawyer would need to review the contract, to see how it is written and interpret it. In some contracts, it is possible. Feel free to call with any questions.

Eli Givoni, Director
Short Sale Department, LLC
561-361-1909
info@shortsaledept.com
http://www.shortsaledepartment.com
Serving all 50 states

MARS Disclosure for General Commercial Communications
IMPORTANT NOTICE:
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
0 votes
Joe Cusumano, Agent, Riverside, CA
Sun Aug 21, 2011
This soundss like a contractual issue. Once the approval has been given by the bank that usually starts the escrow. It sounds like he is under contract and the buyer can go after the buyer for damages. I alos assume that this company will charge for their service. Do some research on the program they are talking about.
0 votes
Cpi, , Los Angeles, CA
Sun Aug 21, 2011
I am actually the listing broker. After working for months, I found a buyer, negotiated the deal with the bank and got an approval. Now my client, the seller, wants to back out of the sale after escrow is opened and buyer has given a deposit and look into another loan mod possibility because of some law firm who marketed them and promised them results.

I have already opened escrow and the lender has told me that if they dont move forward with the short sale that CHASE will foreclose. I am not sure how to convince/advise my client of this since they just dont get it....
0 votes
I have the exact same situation. It sucks because the buyer can only sue for out of pocket expense. To go after the seller for "Specific Performance" is futile and costly. There's nothing the buyer can do or be compensated for the lost time and agony. Sellers today are taking advantage of realtors and the system in hopes of delaying foreclosure. It's a silly game that's becoming more prevalent everywhere. This is one of the reasons why I steer my clients away from shortsales that are occupied by the owner. Vacant shortsales are good.
Flag Wed May 16, 2012
Ron Thomas, Agent, Fresno, CA
Sun Aug 21, 2011
Why would you want to?
Please don't tell me you changed your mind!

If you have a serious problem, such as sickness, loss of job, etc., excplain that to the Buyer's Agent and ask for their help; it may save a lot of grief.
0 votes
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