When is a Short Sale under contract(for tax credit)

[2bindenver]

Find out what type of loan the seller has and if you still want the house, get an amend signed.

[rjrcm]

Originally Posted by aymekae

This whole topic is relevant to my current situation, in which we've had a purchase contract on a short sale home signed by both buyer and seller since 3/1/10. Technically, we've opened escrow (there is an escrow number assigned to this sale), though we have not given the good faith deposit (due to past experience) to move forward with escrow until we receive approval from the seller's lender.

We had a condition in the contract that if the lender does not remove the short sale contingency by 3/31/10, we could withdraw without paying the earnest deposit. At this time, 30+ days past our deadline, we have not withdrawn, and according to the listing agent, the bank is literally on the last step before approval (checking comps).

Since we gave ourselves an out, and it's past our own deadline... do we no longer have a legally binding contract?? Or we do, until we officially withdraw our offer?

Since you opted not to withdraw yet, you still have a binding contract. As I discussed before, you should have other "outs" in your contract if you get approval and move forward, such as inspection and financing contingencies. If you withdraw or the lender does not provide approval, then your contract is canceled.

Edit: I'm making an assumption that your contract has typical short sale conditions, such as ability to cancel if lender does not provide written approval, and the nature of your other contingencies. You should carefully review your contract to understand your cancellation options and contingencies. Consult your Realtor or an attorney if you do not fully understand your contract.

[beach72]

These posts are very hopeful. We have a signed contract with the seller on a short sale. And our home that we're selling has a signed contract before April 30th. But the bank won't look at our offer until we close on our home, hopefully by mid May. Now if I understand the posts, we should get the $6500 tax credit if the bank accepts our offer and we close before June 30th. We would appreciate any comments on our situation. We have lived in our home over five years.