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I have all along been avoiding short sales for obvious reasons. However, recently I made an offer on a "bank approved" short sale that could "close quickly!" Selling agent even disclosed the approved selling price! The previous buyers walked as did there back up offer both tired of waiting for over 3 months and moved on.
I made an offer over asking price which was promptly accepted. In the purchase agreement I put that 3rd party approval must be received within 14 days and close within 21 days after that. Sellers agent said this would not be a problem as everything was ready to go!
They have one more week and now the sellers agent now informs by agent that the bank wants another BPO because the last one is over 90 days old but it should be done by early next week.
What do you think the chances are that they will have everything ready by the end of next week so I can get my inspections/mortgage in order?
I never would have even looked at the house except it was advertised as a bank approved short sale with a quick close. If I don't close by May 1st the taxes double for 2010. I think I may have gotten myself sucked into the short sale madness.
Apparently it was not bank approved if they need another BPO. Obviously the bank hasn't learned the lesson after buyer one and the back-up buyer walked away. You've set your terms; if they're not met, look elsewhere. There is plenty of inventory on the market.
I agree, you've set your terms, they can't meet them, move on. You can put all the deadlines you want in your offers......and the sellers can accept them. But until the bank approves the short sale and accepts your contract, you don't have a contract. That can be six weeks (or more) after the seller accepts your offer. I won't even mention the closings that get all the way to the settlement table and there's a document the seller won't sign.
If you have a deadline, if you are pregnant, must move for a job, will be homeless, a short sale is not for you. There's a reason why they are some of the best deals around. I think you found out. Thick skin with the ability to go with the flow is the only way to survive with your sanity in tact. And even then, it's tough going.
Either way you're going to have a wait.......for the perfect (non-short sale) property to appear or the short sale to close.
That's what I thought. I'm a bit annoyed that it is listed as "bank approved/quick close" with the amount the bank approved all included in the listing and it seems to be a bunch of phooey!
Another little hint to me that it isn't as approved as she's leading me to believe is that in the PA my agent put that upon acceptance of the offer by the sellers the agent would change the status to "pending" which she hasn't done. She states it's because she needs some backup offers in case I walk. If she was so sure this was an easy/quick deal she wouldn't need backups and would have changed it to pending.
That's what I thought. I'm a bit annoyed that it is listed as "bank approved/quick close" with the amount the bank approved all included in the listing and it seems to be a bunch of phooey!
Another little hint to me that it isn't as approved as she's leading me to believe is that in the PA my agent put that upon acceptance of the offer by the sellers the agent would change the status to "pending" which she hasn't done. She states it's because she needs some backup offers in case I walk. If she was so sure this was an easy/quick deal she wouldn't need backups and would have changed it to pending.
Thanks All!
Do you have that is writing, the bit about her not changing the status in the listing? I'm not a Realtor, but I am willing to bet that is not what her terms of agreement for the MLS service calls for and just may be a problem with the Board of Realtors. There is nothing stopping her from accepting back up offers in pending status. This drives the Realtors that are trying to make a living completely crazy.
It was part of the PA that upon seller's acceptance of the offer, the selling agent would change the status of the listing to pending. It didn't say she couldn't accept back up offers which is fine with me. But she didn't change the status to pending and when my agent questioned her about it she said she needed it to stay "Active" to get a back up offer.
I wasn't sure that I wanted to push the issue. Kind of a "pick your battle" thing so to me it wasn't worth it. Should I insist she honor the terms of the PA?
It was part of the PA that upon seller's acceptance of the offer, the selling agent would change the status of the listing to pending. It didn't say she couldn't accept back up offers which is fine with me. But she didn't change the status to pending and when my agent questioned her about it she said she needed it to stay "Active" to get a back up offer.
I wasn't sure that I wanted to push the issue. Kind of a "pick your battle" thing so to me it wasn't worth it. Should I insist she honor the terms of the PA?
In my area, I would issue a "cure notice" advising the agent that they have 3 days to correct the status or be in breach of contract. If you let it go, then you are essentially nullifying that requirement. And as mentioned, the agent may also be in violation of the MLS rules. Here, we must change the status to either Pending or AWC-I (Active with Contingency) unless the buyer and seller sign a Multiple Counter Offer agreement.
Very helpful information. Thank you. So, if she doesn't change it to pending, even after my agent reminded her a few days ago, she is in breach of contract and I can walk away? Or does my agent have to give her the 3 day notice to change the status? My offer was accepted (signed and all) a week ago tomorrow.
I think ultimately they aren't going to be able to provide me with the 3rd party approval by next week so it may be a mute point, but if I find another house can I use that as a reason to walk away without any risk of losing my earnest money?
Don't get me wrong, I really like the house, and would like to buy it, but I'm annoyed that she advertised it as bank approved and wasted our time, ultimately sucking me into short sale pergatory which we made very clear from the beginning I wasn't interested in pursuing.
Very helpful information. Thank you. So, if she doesn't change it to pending, even after my agent reminded her a few days ago, she is in breach of contract and I can walk away? Or does my agent have to give her the 3 day notice to change the status? My offer was accepted (signed and all) a week ago tomorrow.
Discuss with your agent the procedure for handling breach of contract issues. As I said, the 3 day notice is how we do it, may be different for you.
I think ultimately they aren't going to be able to provide me with the 3rd party approval by next week so it may be a mute point, but if I find another house can I use that as a reason to walk away without any risk of losing my earnest money?
Possibly, work with your agent on that issue. Also, check if you used a short sale addendum or clause that may allow you to cancel prior to bank approval. In any case, you did specify a maximum 14 days to get approval, after that you should be able to cancel.
Don't get me wrong, I really like the house, and would like to buy it, but I'm annoyed that she advertised it as bank approved and wasted our time, ultimately sucking me into short sale pergatory which we made very clear from the beginning I wasn't interested in pursuing.
Advertising bank approval when a buyer falls out is a very common tatic with listing agents. The banks rarely give a blank check formal approval for all buyers. Each approval is specific to the buyer they are working with and the net they will get out of the deal. However, having a prevous buyer run through the process may make it smoother for the next buyer.
In our association it is a rule that the status be changed to contingent. That status removes it from the listing feeds to outside websites and the mls but agents are able to still see it. If the short sale addendum to the contract says it would be changed, it should be changed regardless if she is looking for a back up or not. In our association she could be fined for such a thing.
I would ask your agent to insist she change the status. If she still doesn't, I would call the local association and explain the situation... one call from them and it will be handled.
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