How can we properly cancel a lender approved short sell?

Asked by Kristie Spurlock, 98168 Fri Jul 27, 2012

Our mortgage is underwater so we decided to sell our property a few months ago. We got a few offer so we picked one and sent it to our bank through our agent. We received a letter last Tuesday stating that our short sell has been approved. We now decided to keep our property and cancel the short sell. Is it possible? We have spoken to an attorney and he said we can cancel it as long as we haven't signed NMLS form 90-SS or the bank approval document. And according to form 22-SS that we signed when we listed our property, “this agreement is contingent upon seller obtaining written consent from seller's creditor for the short sell and seller acceptance of any condition imposed by seller creditor”. So if we don't agree with lender conditions can we cancel the short sell contract. Our agent is not happy to hear this and said the buyer can sue us but an attorney said we should be fine. Who is correct? Can we be sued by the buyer, buyer agent, and/or our agent?

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Dan Tabit’s answer
Dan Tabit, Agent, Issaquah, WA
Fri Jul 27, 2012
Your lawyer is the one who has access to the contracts that control your transaction and the ability to ask you direct questions and get specific answers. We would be practicing law and our psychic abilities to provide a more qualified answer.
When there is a dispute between what an agent/broker says and what your qualified attorney says, I'd go with the attorney most of the time. If you are still uncertain, get another attorney's perspective.
Finally and most importantly; why the change of heart? You are still upside down on you unit, you endured months of preparation, showings and waiting for a bank to respond having put a lot of people to work and now you have a change of heart?
Your agent is only compensated for a closed transaction; of course they are upset over working and investing time and money into your deal and receiving nothing out of it. The buyer's agent is in the same position; the buyer's have bypassed other homes they could have purchased only to be let down.
I'm not saying you should complete the sale to be "nice' to the brokers and the buyer against your interests, but you should consider carefully all that you've gone through and asked others to before you just change your mind.
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Stacey Lange, Agent, Kirkland, WA
Fri Jul 27, 2012
As agents, we cannot offer legal advice. It seems you have already done your due diligence in consulting with an attorney. If you are unsure of his advice, you could consult with another attorney. You might also discuss the matter with your agent's broker, it is their job to ensure your interests are best protected.
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Mark Despain, Agent, Seattle, WA
Fri Jul 27, 2012
This is not the place to get advice for such an important decision. Talk to your attorney.
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Kary Krismer, Agent, Renton, WA
Fri Jul 27, 2012
I guess I would ask why you're asking people on an Internet site questions if you've already obtained an attorney's opinion?

Also not clear is why you don't want to sell. Was the bank not waiving the deficiency? Is there some other condition you don't agree with?

If you're not really unhappy with the terms, then I could see some exposure, but I assume you talked to your attorney about that. Perhaps you need to talk to the attorney again.
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edfinlan, Agent, Burlington, WA
Fri Jul 27, 2012
Just because someone sues you does not mean they will win in court. I do a fair amount of short sales and can understand your broker being unhappy after putting forward the amount of effort it takes to get a short sale approved but he/she also knew the risks going in.
The real question to me is why have you changed your mind? Have things changed for you financially? Do you have a hardship that made it difficult for you to make your payments?If you didn't, it is unusual for a lender to approve a short sale.
In the end, I think I agree with the attorney but if you are really under water and are having a hardship that makes it difficult to make the payment. why wouldn't you short sell the home and not be foreclosed on?
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Carl SanFili…, Agent, East Brunswick, NJ
Fri Jul 27, 2012
Typically seller has to accept the banks terms of short sale approval. Sometimes the bank gives approval but the seller will not consent to it. I would defiantly double check with an attorney and have them guide you.
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