Wasn't told our offer was on a shortsale! (new agent, settlement, contract)

[VeryUpset!]

My husband and I put in an offer on a house a few months ago. The sellers counteroffered, and we accepted this amount. A contract was created. Everything seemed to be going smoothly with our settlement. Our loan was ready to go, we had a house inspection, and the house was appraised.

One week before settlement (which was supposed to happen last week) we received a call from our real estate agent. He told us that there were some problems with our settlement. He told us that the home was being sold as a short sale. We now know what this means but that was the first we heard that term. We had no idea during the months leading to this point that we had a contract signed on a short sale home. Apparently, our agent knew this since we signed our contract but did not tell us.

At this point we are waiting for the bank to approve the short sale. We are very worried because in three weeks the lock on our loan will run out. We have already spent money on a home inspection, appraisal, and loan origination fee totally about 1000 dollars. Also, interest rates have gone up almost a whole percent since we locked in our loan.

If this does not work out, is there anything we can do to rectify the money spent as well as the extra money we will have to pay on our mortgage if we get another loan since rates have gone up? We are very upset that our agent, who is supposed to be working for us, did not inform us of what we were getting into. This is not a new agent. He has been working for years and supposedly knows what he is doing. We feel very taken advantage of.

To make matters worse, our agent told us that this (short sales) are very common so he didn't think he needed to tell us since they usually work out. He also never returns our phone calls. We receive any information we can about what is going on from the seller's agent.

I apologize that this is so long! If anyone has any advice please let me know!

Thanks

[MikeJaquish]

Originally Posted by VeryUpset!

My husband and I put in an offer on a house a few months ago. The sellers counteroffered, and we accepted this amount. A contract was created. Everything seemed to be going smoothly with our settlement. Our loan was ready to go, we had a house inspection, and the house was appraised.

One week before settlement (which was supposed to happen last week) we received a call from our real estate agent. He told us that there were some problems with our settlement. He told us that the home was being sold as a short sale. We now know what this means but that was the first we heard that term. We had no idea during the months leading to this point that we had a contract signed on a short sale home. Apparently, our agent knew this since we signed our contract but did not tell us.

At this point we are waiting for the bank to approve the short sale. We are very worried because in three weeks the lock on our loan will run out. We have already spent money on a home inspection, appraisal, and loan origination fee totally about 1000 dollars. Also, interest rates have gone up almost a whole percent since we locked in our loan.

If this does not work out, is there anything we can do to rectify the money spent as well as the extra money we will have to pay on our mortgage if we get another loan since rates have gone up? We are very upset that our agent, who is supposed to be working for us, did not inform us of what we were getting into. This is not a new agent. He has been working for years and supposedly knows what he is doing. We feel very taken advantage of.

To make matters worse, our agent told us that this (short sales) are very common so he didn't think he needed to tell us since they usually work out. He also never returns our phone calls. We receive any information we can about what is going on from the seller's agent.

I apologize that this is so long! If anyone has any advice please let me know!

Thanks

What state are you in?

[VeryUpset!]

We are in Pennsylvania.

[MikeJaquish]

If you have lost faith in your agent, speak with the Managing Broker, Broker of Record, or whatever title the Head Poobah uses.

If you cannot get satisfaction, these folks are charged with helping you:
BPOA: Mission Statement

[SIZE=5][SIZE=5]

UNETHICAL
OR UNLICENSED
ACTIVITY

[/SIZE][/SIZE][SIZE=3][SIZE=3]

If you believe the practice or
service provided by a licensed
professional
to be unethical, below an
acceptable standard or out of the
scope of the profession; or if you
are aware of unlicensed practice,
please call the
Bureau of Professional and
Occupational Affairs
complaints hotline at:

[/SIZE][/SIZE]

In Pennsylvania:
1-800-822-2113
Out of State:
1-717-783-4854

[SIZE=3][SIZE=3]

A complaint form is available at
Department of State

[/SIZE][/SIZE][SIZE=3][SIZE=3]

to file an online complaint,

[/SIZE][/SIZE][SIZE=3][SIZE=3]or to print and mail.
[/SIZE][/SIZE]

[oldmanbob]

Short sells, means, lots of waiting and your agent should be ashammed for not telling you. Never assume, and you can always walk before the bank accepts, but if you like the deal, then probably best to wait it out. Good luck, and sorry you were not informed. I have one under contract now, and told my client, exactly what to expect, as best as I could, and our problem is the list agent is having terrible time of getting the seller to work and supply all the necessary goods. Were waiting, and I know how tough that is for you, as mine are going thru the same.

[MikeJaquish]

Originally Posted by oldmanbob

Short sells, means, lots of waiting and your agent should be ashammed for not telling you. Never assume, and you can always walk before the bank accepts, but if you like the deal, then probably best to wait it out. Good luck, and sorry you were not informed. I have one under contract now, and told my client, exactly what to expect, as best as I could, and our problem is the list agent is having terrible time of getting the seller to work and supply all the necessary goods. Were waiting, and I know how tough that is for you, as mine are going thru the same.

Bob,
Would you have your client out of pocket a couple of grand before the bank approved the sale?
I can't see it...

[c21boquetebocasgold]

Originally Posted by VeryUpset!

My husband and I put in an offer on a house a few months ago. The sellers counteroffered, and we accepted this amount. A contract was created. Everything seemed to be going smoothly with our settlement. Our loan was ready to go, we had a house inspection, and the house was appraised.

One week before settlement (which was supposed to happen last week) we received a call from our real estate agent. He told us that there were some problems with our settlement. He told us that the home was being sold as a short sale. We now know what this means but that was the first we heard that term. We had no idea during the months leading to this point that we had a contract signed on a short sale home. Apparently, our agent knew this since we signed our contract but did not tell us.

At this point we are waiting for the bank to approve the short sale. We are very worried because in three weeks the lock on our loan will run out. We have already spent money on a home inspection, appraisal, and loan origination fee totally about 1000 dollars. Also, interest rates have gone up almost a whole percent since we locked in our loan.

If this does not work out, is there anything we can do to rectify the money spent as well as the extra money we will have to pay on our mortgage if we get another loan since rates have gone up? We are very upset that our agent, who is supposed to be working for us, did not inform us of what we were getting into. This is not a new agent. He has been working for years and supposedly knows what he is doing. We feel very taken advantage of.

To make matters worse, our agent told us that this (short sales) are very common so he didn't think he needed to tell us since they usually work out. He also never returns our phone calls. We receive any information we can about what is going on from the seller's agent.

I apologize that this is so long! If anyone has any advice please let me know!

Thanks

You'll see I bolded some of your post, but I have one question I would like clarification on because I'm a bit tired right now: Did the listing agent disclose/advertise, etc. at the beginning that this was a short-sale or something that your agent found out after the contract was signed, approved and then right before settlement was told it was a short-sale - maybe some change on the seller's part (thus problems with your settlement), then your agent called you, etc. etc. etc. Not returning your phone calls is bad enough, but before I comment further I really would like clarification on my previous question.

[Silverfall]

Um...a short sale status is material to the contract and needs to be disclosed in most states (I assume all, but you never know...) because it impacts the seller's ability to clear title.

If your agent didn't tell you that it was a short sale and he knew that it was a short sale, then follow that little ol' link that MikeJ gave you to file a complaint against your agent. It violates the law to not disclose a material fact to a client.

I 100% agree with MikeJ's advice. Get the principal broker involved in your transaction...now.

[middle-aged mom]

In my area a short sales require an addendum, because the sale is contingent upon the bank's approval.

The seller is apt to be in breach of the contract, without such contingency.

Are you absolutely certain your contract does not provide for this contingency?

In any event, your agent's behavior is dispicable.

[MeInDenudinFL]

Originally Posted by VeryUpset!

To make matters worse, our agent told us that this (short sales) are very common so he didn't think he needed to tell us since they usually work out.
Thanks

They usually work out? That's unbelievable! Anybody who read this site a little bit can see that is to the contrary. Wow!