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IN A SHORT SALE: Can a buyer avoid his offer being tied up at the bank by adding a clause to the purchase agreement that states he may rescind the offer without penalty or loss of earnest money if the bank does not accept or respond in X days?
Yes, I have had buyers and sellers do something like you mention. Some people will put the house must close within 30 days of bank approval. Some include a specific date to have a response from the bank and if that date comes and goes they have the right to walk away. In my personal experience having this type of clause in your contract does not make the bank move any faster but it does give you an "out" if you are tired of waiting. You asked if it will help a buyer avoid having the offer tied up at the bank....I don't think having a response date in the contract will make the bank move faster but it certainly spells things out to the seller in terms of how long you are willling to wait. You can always extend this date if you think the bank will respond soon. Perhaps others have had another experience with this but in my experience banks work on their time and that it that. Good luck to you.
IN A SHORT SALE: Can a buyer avoid his offer being tied up at the bank by adding a clause to the purchase agreement that states he may rescind the offer without penalty or loss of earnest money if the bank does not accept or respond in X days?
The clause is used to protect you and your escrow deposit if you've put one up. In my experience it doesn't make the bank move any quicker unless it's already been assigned to someone and they are constantly reminded by the Realtor® working with them that there is an expiration.
When I've worked with buyers making offers on short sales there is no escrow put into play before 48 hrs of acceptance of the offer by the bank and no time periods start until that happens either. This way there is no outlay of funds by the buyer until and unless the bank has approved the contract.
The clause is used to protect you and your escrow deposit if you've put one up. In my experience it doesn't make the bank move any quicker unless it's already been assigned to someone and they are constantly reminded by the Realtor® working with them that there is an expiration.
When I've worked with buyers making offers on short sales there is no escrow put into play before 48 hrs of acceptance of the offer by the bank and no time periods start until that happens either. This way there is no outlay of funds by the buyer until and unless the bank has approved the contract.
I agree the bank doesn't move any faster, but at least as a buyer you can decide if you still want the same property or want to move forward. Banks should understand that todays buyers are also people looking for a deal and aren't as much "emotional attached" as before and will walk to the next property that comes on the market, except for new buyers.
I agree the bank doesn't move any faster, but at least as a buyer you can decide if you still want the same property or want to move forward. Banks should understand that todays buyers are also people looking for a deal and aren't as much "emotional attached" as before and will walk to the next property that comes on the market, except for new buyers.
Speak for yourself. In the Vegas area the majority of REPO/Short buyers appear to be owner occupants. Palmcoast has it right. Use some strategy that keeps the escrow money at zero or close to it until the bank approves.
Put up one humdred with a greater EMD on bank approval. Or reuire a further buyer signature after bank approval.
Done, it's in with a clause that says if lender fails to accept in 3 weeks, we terminate the contract without penalty & earnest money is returned. Cross your fingers for us now. the sellers agent thinks it could come back in a week-10 days because he is already in touch with the bank & they are expecting our offer.
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