Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
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.
Quote:
Originally Posted by 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.
I do agree the MB needs to be contacted NOW. I'm quoting & bolding part of the above posters comments, because that's in part why I asked for a bit of clarification B4 I commented. The short sales I worked everyone knew from the get go it was a SS vs. straight sale, it was addressed in contracts, addendums, etc. and the OP had gone through every process, including loan approval, to right up to closing then got the call from her agent that there were problems and that this was a SS. I know when I'm upset I do not always put things in sequence, so I was requesting clarification if this was something that was not disclosed at the beginning or if OP's agent knew all along that it was a SS and did not disclose that fact or, if after months from offer to closing, something changed in the seller's situation that made it go from a traditional sale to a SS. Unfortunately, it's not like all LAs disclose what they are required by law to disclose (or the sellers themselves for that matter), just like not all buyer agents properly advise their clients.
If it was a short-sale all along and if the OP agent did not disclose at the beginning that the house they were contracting for was a SS, then the agent should have the book thrown at them for too many breaches of conduct to list. I simply was wondering how a short sale transaction could be overlooked when it is a material part of the contract and everything was going smoothly until right before closing - then OP was told that there were problems and the house was being sold as a short sale.
Anyway, good luck OP, call the MB ASAP and if your agent did know all along that this was a SS and didn't disclose, then file a complaint with every entity that oversees a real estate agent's conduct.
I wanted to clarify for those that asked questions.
I need to look through our contract again but I know there is nothing that says "short sale". I have heard that sometimes in contracts short sales can also be stated as "contingent on bank approval" instead of the actually words "short sale". If that is the case that our contract says "contingent on bank approval", I would have assumed that that is a statement that is normal in all contracts. I have bought property before, but I am not a professional, that's why I wanted to work with a real estate agent.
My sequence of events was correct. The sellers agent told my agent that it was a short sale when we were negotiating price, before the final contract was signed. This was 2-3 months ago. I was told that it was a short sale a week before settlement (two weeks ago) since settlement was supposed to be last week. We found out about when our agent was told by talking to the seller's agent. It was only after we knew this that our agent admitted that he has known this for awhile, he just didn't think it was important to tell us.
I appreciate all the advice that has been given. We will file complaints. Besides filing complaints, do you all think there is any legal action that can be taken to get our money back if settlement does not take place before the lock on our interest rate runs out? It made me so mad when my agent said that those costs (loan origination fee, appraisal, home inspection) were a risk. A risk is something you take when you are well informed of a situation. We had no idea what we were getting into. I am a good researcher. If I would have found out that this home would be a short sale and looked into how difficult short sales could be, I highly doubt we would have gone ahead with this sale.
I am sad that I now completely distrust our agent. I feel like we were manipulated and taken advantage of.
Again, thanks for the advice. I will let you know if there are any updates on our situation.
I wanted to clarify for those that asked questions.
I need to look through our contract again but I know there is nothing that says "short sale". I have heard that sometimes in contracts short sales can also be stated as "contingent on bank approval" instead of the actually words "short sale". If that is the case that our contract says "contingent on bank approval", I would have assumed that that is a statement that is normal in all contracts. I have bought property before, but I am not a professional, that's why I wanted to work with a real estate agent.
My sequence of events was correct. The sellers agent told my agent that it was a short sale when we were negotiating price, before the final contract was signed. This was 2-3 months ago. I was told that it was a short sale a week before settlement (two weeks ago) since settlement was supposed to be last week. We found out about when our agent was told by talking to the seller's agent. It was only after we knew this that our agent admitted that he has known this for awhile, he just didn't think it was important to tell us.
I appreciate all the advice that has been given. We will file complaints. Besides filing complaints, do you all think there is any legal action that can be taken to get our money back if settlement does not take place before the lock on our interest rate runs out? It made me so mad when my agent said that those costs (loan origination fee, appraisal, home inspection) were a risk. A risk is something you take when you are well informed of a situation. We had no idea what we were getting into. I am a good researcher. If I would have found out that this home would be a short sale and looked into how difficult short sales could be, I highly doubt we would have gone ahead with this sale.
I am sad that I now completely distrust our agent. I feel like we were manipulated and taken advantage of.
Again, thanks for the advice. I will let you know if there are any updates on our situation.
The seller disclosed the short sale to their agent (releasing them from damages because they made the disclosure) who in turn disclosed that to your agent. I would call your agents principal broker and talk with them about damages if this doesn't work out.
Out here you could take your agent to small claims court ($80 to file, $7500 damages limit), but what legal recourse you have against your agent depends on what your contract says you can do and state laws.
The seller disclosed the short sale to their agent (releasing them from damages because they made the disclosure) who in turn disclosed that to your agent. I would call your agents principal broker and talk with them about damages if this doesn't work out.
Out here you could take your agent to small claims court ($80 to file, $7500 damages limit), but what legal recourse you have against your agent depends on what your contract says you can do and state laws.
Ditto. Talk to the MB and possibly a RE attorney (try for a free initial consultation - a lot of attorneys give free IC) about possible recourse. All agents have to carry E&O insurance and possibly a settlement could be reached through the agent's insurance carrier (something you could most likely file yourself) - but get with the MB FIRST because they might be the voice of reason in your situation and do please keep us updated. Best of luck during this stressful situation.
There are some clauses that need to be in the contract to tell you it's a short sale. You really need to have a sit down with that agents Broker in Charge.
BTW, for all the public reading this, just because an agent has been in the business for years doesn't mean he's active or competent (not saying that about the agent in question, just in general). It's easy to get and hold a license, so find out how many deals they are closing a year and what kind of training/experience they have. If you're buying a foreclosure or short sale, you'd better be darned sure you have someone who knows what they are doing. Best of luck to the OP.
There are some clauses that need to be in the contract to tell you it's a short sale. You really need to have a sit down with that agents Broker in Charge.
BTW, for all the public reading this, just because an agent has been in the business for years doesn't mean he's active or competent (not saying that about the agent in question, just in general). It's easy to get and hold a license, so find out how many deals they are closing a year and what kind of training/experience they have. If you're buying a foreclosure or short sale, you'd better be darned sure you have someone who knows what they are doing. Best of luck to the OP.
Out here our newer agents tend to me more up on real estate law issues. They changed the training standards here in 2002 and required more training in order to become a real estate agent here. As such, some of the newer agent have a better grasp of contract law than the "more experienced" agents.
We met with our agent today and confronted him about his dishonesty. He tried to make excuses for his behavior and is back-peddling big time now that he is aware that we are not going to end up paying for things if this sale does not go through since it wasn't handled properly (this is what we told him). He said he we could sign a paper to release ourselves from dealing with him although I think he said this to somehow keep himself from being held accountable. He also said he would cut us a check for the costs we paid (home inspection, appraisal, loan origination fee). This seems to me to prove that he knows he messed up. He was acting very shady the whole time. Even if we get this money back it doesn't change the fact that if we put an offer in for another house, our interest rate would be higher since rates went up. If I would have known this was a short sale, I would not have agreed to the contract, I am not a risk taker or patient person to wait months and months on a response.
I am not agreeing to anything until we meet with a lawyer. I am still hoping the whole thing just goes through, although I realize it very well may not.
The other thing is that our agent is actually the head agent of his company in our town. His superior travels around to various places but I will try to hunt him down.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
