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be very careful with this,,if BofA finds out that the buyer is a broker, they may kill the deal. BofA has in informal policy that they do not want agents buying their distressed properties.
Paddy Deighan J.D. Ph.D
http://www.homesavers.pro
Thom brought up a good point it may not be true cash - or something where they are pulling equity from something else (I've had that presented as "cash" before) or a bridge loan, etc.
BUT I find this to be a constant problem where lenders, buyers and their agents and closing agents all think b/c the approvals are for a later date they can just take it upon themselves to ignore the contract date and close by then- or just tell me to get an extension even though I tell them they are final up front. As we all know closing on this can be a nightmare due to all the last minut things that pop up. PLUS Green Tree requires funds to be received the day of their extension- this means wire needs to be confirmed and closing needs to take place prior.
Have you checked with Green Tree yet for an extension even though they may have said before none? They really have nothing to lose as 2nd as long as you can keep it at the same price. I suprisingly just got a 2nd extension with them.
Going back to a discussion several weeks ago, this is exactly why the buyer should never see the approval letter. The approval notice would not outline the expiration of the approval letter, but would provide a COE based on the contract -- well before the approval letters expried. The buyer is bound to the terms of the contract and the approval letter was not written to the buyer. Now they are using it to try to justify a breach. Not a great situation, but the pandora's box is openend. Greentree may or may not be bluffing, but you won't know until the deal falls apart. The big lesson here is that the seller was exposed by the buyer having information they shouldn't have had. The expiration of the approval letter(s) has no bearing on the terms of the contract. Solution? The buyer is a broker. Ask your broker to contact the buyer broker-to-broker and remind them of their exposure. Tell your seller to contact their attorney for further advice on how to proceed. If you embed yourself any further in this, it can get bad for you.
Marti -
In CA, it is required that the Short Sale Approval Letter be provided to the Buyer within 3 days after issuance / receipt.
I've heard that and saw the language that was posted on SSS when the discussion was taking place. I also showed it to my SS attorney. A notice of approval might satisfy the requirement, but we're not in CA. If the law/rule requires that the actual approval letter be shared, and not a notice that outlines the key points of the letter, I'd think about taking the matter to RAPAC. The approval belongs to the seller and no law/rule can force you to violate fiduciary -- it's cases like this that might get that requirement changed.
There's no real reason not to share the approval letter with the Buyer. With the Seller's permission, if the agent removes any personal information such as account number, etc. from the letter who really cares? Providing the letter keeps the Buyer feeling good about the transaction. There's no reason to "hide" anything. Why does this requirement need to be changed?
Sounds like it's not really cash and they are trying to get a new buyer in place to flip it - which you should not part-take in. Page 2, Section 3 / K outlines (paraphrased) that a buyer can change financing anyway they want, but they have to continue to pursue the original financing (cash) specified in the Agreement - and - if the buyer cannot get whatever new financing they are looking for, they and not excused from the obligation to close under the original terms.
I think you are not going to find out what the story is until the last moment. And, yes, the Buyer has until the date of the approvals to close. So if the 1st says 10/11/2012 and the 2nd says 10/2/2012 - you will know on 10/2/2012 if the Buyer has breached the contract and the Seller can cancel.
I would try to line-up a new buyer ASAP. It's likely the 2nd will give you and extension for a new buyer because they are not going to foreclose.
You have a few options. Yes, the second is probably bluffing. They don't have a choice. The other agent might be reminded, as leverage, that if BofA were to find out the purchaser is licensed, they may decline their rights to a commission, regardless of who represents who. That's bold leverage, but sometimes out of control agents and buyers have to be negotiated with very sternly in preference of serving our seller. If this were my sale, I wouldn't like it, but I would probably just close on 10/11. Your seller obviously has the option of terminating the contract since the buyer is not acting in good faith. Unfortunately, I've learned we have to become experts at dealing with people who don't follow the rules and do shady business (and have outright neglect for their legal obligations) this day and age.
I would cancel and put in back on the market the banks will work better on a extend that way ,and maybe the buyer will wake up that way, letter in han
d take it or leave. The fact your in the middle of a buyer flip with BOA on board is really not a good idea either.
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