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Old 10-03-2012, 05:26 PM
 
3,914 posts, read 4,938,126 times
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Quote:
Originally Posted by krokus View Post

Even Foreclosures are not that straightforward in today's market. These seem to be moving toward the fashion of Short Sales wherby the bank collects bids, ignores the bids it does not like and juts sits there, waiting for an offer it does like.
No it doesn't work like this at all with a sale of a bank property or for that matter any property. If the bank is selling the property then they have listed it with MLS for a given price. If you walk in with a full price no contingency offer, then the house is yours. The bank may choose to ignore your offer, but they are liable for paying the 6% real estate fee because the real estate agent met their part of the bargain. In any case, you should always put a time period on an offer as to when it's no longer valid.

IMO, if you offer full asking price on any house in Charlotte that is for sale via a standard sale you will be a home owner. This market is not one of those where the owners take bids on a certain date. It's the exact opposite of that.

In the case of a short sale, none of this applies.
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Old 10-03-2012, 06:37 PM
 
6,321 posts, read 10,258,155 times
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Quote:
Originally Posted by frewroad View Post
The earnest money is to prove you are serious, it's not a limit of your potential damages if you walk away. If you walk out on an accepted contract you are liable for a whole lot more than just earnest money. You are also liable for damages your actions caused to the seller and their real estate agents should they choose to pursue it. You really do not want to enter into a real estate contract with this sort of contingency plan.
Incorrect I believe. Standard NC Offer to Purchase:

http://www.ncrealtors.org/uploads/sample-2-T.pdf

Quote:
(e) “Earnest Money Deposit”: The Initial Earnest Money Deposit, the Additional Earnest Money Deposit and any other earnest monies paid in connection with this transaction, hereinafter collectively referred to as “Earnest Money Deposit”, shall be deposited and held in escrow by Escrow Agent until Closing, at which time it will be credited to Buyer, or until this Contract is otherwise terminated. In the event: (1) this offer is not accepted; or (2) a condition of any resulting contract is not satisfied, then the Earnest Money Deposit shall be refunded to Buyer. In the event of breach of this Contract by Seller, the Earnest Money Deposit shall be refunded to Buyer upon Buyer’s request, but such return shall not affect any other remedies available to Buyer for such breach. In the event of breach of this Contract by Buyer, the Earnest Money Deposit shall be paid to Seller upon Seller’s request as liquidated damages and as Seller’s sole and exclusive remedy for such breach, but without limiting Seller’s rights under Paragraphs 4(d) and 4(e) for damage to the Property or Seller’s right to retain the Due Diligence Fee. It is acknowledged by the parties that payment of the Earnest Money Deposit to Seller in the event of a breach of this Contract by Buyer is compensatory and not punitive, such amount being a reasonable estimation of the actual loss that Seller would incur as a result of such breach. The payment of the Earnest Money Deposit to Seller shall not constitute a penalty or forfeiture but actual compensation for Seller's anticipated loss, both parties acknowledging the difficulty determining Seller’s actual damages for such breach. If legal proceedings are brought by Buyer or Seller against the other to recover the Earnest Money Deposit, the prevailing party in the proceeding shall be entitled to recover from the non-prevailing party reasonable attorney fees and court costs incurred in connection with the proceeding.
....

Quote:
Originally Posted by frewroad View Post
Many people confuse them with foreclosures, as already demonstrated above.
Who was confusing short sales with foreclosures? A couple people including myself were simply offering opinions about what made them similar, the main similarity being that they can often times be in bad shape. However I even pointed out that the short sales I saw were often in worse condition than the foreclosures. The only post I saw that may have been confusing the two was 28173, who said that short sales often have no one living in there, but even he didn't seem confused as that might even the case sometimes. However in short sales the previous owner is still involved in the sale so in the ones I saw there were usually people living there.
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Old 10-03-2012, 06:50 PM
 
3,914 posts, read 4,938,126 times
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Quote:
Originally Posted by GoPhils View Post
I


Who was confusing short sales with foreclosures? A couple people including myself were simply offering opinions about what made them similar, the main similarity being that they can often times be in bad shape. However I even pointed out that the short sales I saw were often in worse condition than the foreclosures. The only post I saw that may have been confusing the two was 28173, who said that short sales often have no one living in there, but even he didn't seem confused as that might even the case sometimes. However in short sales the previous owner is still involved in the sale so in the ones I saw there were usually people living there.
Though you highlighted it, you completely missed the part "At The Seller's Request". They don't have to accept the rrnest money as compensation for damages and can sue you for actual damages. Furthermore given that this is a short sale, every other party who signed that contract can sue you as well. This includes the broker and the bank. I will continue to stand by that it's a very bad strategy to include a contract breach as the part of any plan to purchase a short sale.

I simply don't understand the point (if any) quoted above.
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Old 10-03-2012, 06:58 PM
 
6,321 posts, read 10,258,155 times
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Quote:
Originally Posted by frewroad View Post
Though you highlighted it, you completely missed the part "At The Seller's Request". They don't have to accept the rrnest money as compensation for damages and can sue you for actual damages. Furthermore given that this is a short sale, every other party who signed that contract can sue you as well. This includes the broker and the bank. I will continue to stand by that it's a very bad strategy to include a contract breach as the part of any plan to purchase a short sale.

I simply don't understand the point (if any) quoted above.
Not sure which part of my post your second paragraph is referring to. But anyway, who was confusing short sales and foreclosures?

There is also this quote in the contract:

Quote:
(f) Buyer’s Right to Terminate: Buyer shall have the right to terminate this Contract for any reason or no reason, by delivering to Seller written notice of termination (the “Termination Notice”) during the Due Diligence Period (or any agreed-upon written extension of the Due Diligence Period), TIME BEING OF THE ESSENCE. If Buyer timely delivers the Termination Notice, this Contract shall be terminated and the Earnest Money Deposit shall be refunded to Buyer
Although as you mentioned earlier, I'm not sure how likely it is for short sale sellers to approve a due diligence period (I actually think it is fairly common, and again I believe the seller is the one who accepts the offer, the bank just must approve it). Nonetheless, if they don't, you don't lose anything other than the time used to write up the offer. If they do, then you can conduct your inspection and walk away if you don't like what comes out of it.
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Old 10-03-2012, 07:10 PM
 
41 posts, read 67,793 times
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A little twist to the short sale story...apparently, the house hasn't been approved for short sale. The lender had no clue the seller's were selling their house as a short sale until the seller's agent submitted my offer. The sellers' are going through a divorce so the lender might approve it as a short sale. So situation still in limbo...leaning towards home inspection falls into place...cross your fingers for me
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Old 10-04-2012, 02:52 AM
 
642 posts, read 1,164,004 times
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Quote:
Originally Posted by frewroad View Post
No it doesn't work like this at all with a sale of a bank property or for that matter any property. If the bank is selling the property then they have listed it with MLS for a given price. If you walk in with a full price no contingency offer, then the house is yours. The bank may choose to ignore your offer, but they are liable for paying the 6% real estate fee because the real estate agent met their part of the bargain. In any case, you should always put a time period on an offer as to when it's no longer valid.

IMO, if you offer full asking price on any house in Charlotte that is for sale via a standard sale you will be a home owner. This market is not one of those where the owners take bids on a certain date. It's the exact opposite of that.

In the case of a short sale, none of this applies.
I am sorry, but you are wrong here, at least in my own experience. I have been in exactly the situations I describe within the last six months, in Charlotte. I have seen at least one foreclosure go for ABOVE the MLS listed price. I also know, from experience, in Charlotte that at least one short sale worked exactly as I described. If I were not absolutely certain, I would not have said so.

You are right in as far as the way you describe it is the way it is supposed to work but banks have wised up and some (maybe not all) will try to maximise their gain from property sales. Again, it may well work as you describe in most cases and, maybe I was just unlucky. Actually, the seller was unlucky in my two cases and I just backed away - byeee.

My realtor also tells me that she had seen this behaviour before. Rarely, she said but it had happened.

I guess that we all have a different tale to tell based on what we have previously experienced.
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Old 10-04-2012, 02:55 AM
 
642 posts, read 1,164,004 times
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Quote:
Originally Posted by Notorious1963 View Post
A little twist to the short sale story...apparently, the house hasn't been approved for short sale. The lender had no clue the seller's were selling their house as a short sale until the seller's agent submitted my offer. The sellers' are going through a divorce so the lender might approve it as a short sale. So situation still in limbo...leaning towards home inspection falls into place...cross your fingers for me
Oooops. Sounds like a S**t, oh dear moment.

Good luck.
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Old 10-29-2012, 12:03 PM
 
42 posts, read 55,280 times
Reputation: 53
They wouldn't let us close on the house (short sale) because of a failed inspection, but the inspection was mandated...
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Old 10-29-2012, 01:35 PM
 
Location: Charlotte, NC
153 posts, read 194,538 times
Reputation: 77
Without going into all of that... I used an AWESOME inspector and he charged $345, not $500. Not sure if $500 was quoted to you, or if it's average, or what. Feel free to DM me (anyone) for my inspector's info.
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Old 10-29-2012, 05:42 PM
 
7,126 posts, read 11,637,486 times
Reputation: 2597
Quote:
Originally Posted by chb119 View Post
To me HI’s are not that important, go in check the systems yourself, then call in a specialist if something does not work.

Although I don't recommend an inspection for what is basically a" as is sale" the average home buyer cannot "check out" problems such as foundation problems, leaking roofs, electrical or plumber issues, drainage, septic...(enough?)
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