Short sale approved, escrow opened, 10 days prior to close and seller called bank to cancel short sale. He will re-instate.
Usually when I think about a case like this I think... "Well, probably they didn't even explain the seller his other options to save his home".
Well, I assist the seller obtain his loan modification back in early 2010 (payment went from 2200 to 1300). Then instead of signing it, he called me to do a short sale due to the fact he is getting divorce from the wife, and he wants to get rid of it. After explaining the consequences, he insists short sale is best. We waited some time, and then we started the process. Wife agree.
Now, after I was hired to list the property, obtained a qualified buyer, got the short sale approved, opened escrow and being 10 days away from closing escrow, he calls the bank and cancels short sale.
He mentioned it to me, and I told him is a valid intention -since I believe is his right to save his home despite me looking like Ive being taken for a ride...- but to inform himself to avoid possible legal issues or possible liabilities not from me but from the buyer... (never threatened him)
Now, negotiator emailed me to let me know he called and cancelled. He has being always a good client and has a good relationship with me, however as soon as I informed him of the short sale approval, he became unresponsive and uncooperative .
Buyer has obtained financing; paid for her appraisal, for her inspection report and it was ready to close, but now this happen. In the meantime, he is not returning my call.
If anybody has a suggestions I would greatly appreciate it.
Thanks!
Replies to This Discussion
-
Permalink Reply by Rob Regan on
-
It sounds to me like he is in breach of both your Listing Agreement and the buyer's Purchase contract. I'd run it by my Broker or your own attorney (CAR legal hotline is another choice in California) and insist that he runs his decision by an attorney. Someone who is in financial distress enough that he can qualify for both a loan mod and a short sale - and now potentially setting himself up for even more trouble. Wow!
-
Permalink Reply by Shannon M Thomas on
-
Sellers do the darndest things. I have one that we were set to close just a few days from and found out the seller had filed bankruptcy. Seller Did inform the attorney but the attorney didn't include the right to finish the sell. The buyer and of course all involved were very upset. Luckily it looks like we had enough time to remedy the situation. Good luck with your complicated situation.
-
Permalink Reply by Enrique Vasquez-Plaza on
-
Thanks for the advice. We are now talking again and it seems that we still ahve a deal. I will post again as the story develops. This site its great and i am glad we can all discuss this things. Thx
-
-
Shannon, i forgot to tell you that I had that happened to me as well, and yes, after the bk was done, we got it!. We - short sale agents- deal with a lot of unique and complex situations with this clients. We must understand, learn, execute and succeed. Good luck to all!!!
-
-
Enrique, sometimes time is all it takes. Congrats on maybe getting to close still.
-
-
I have the reverse. Buyer (an investor) is refusing to back away from the contract and wants to drag this out. After fighting for 6 months with this (ASC is the servicer and United Mortgage the investor) we finally have this approved. Only issue is we have the approval was 350,000, which is 75,000 more than the original contract and there are tenants. The investor wants me to pay or escrow my commission because of the tenants before he will pick it up. So basically he wants me to pay for the property to be vacant. This with the investor knowing that he had to pay for the tenants to move out and we have this in writing.
-
Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
-
Did the bank revoke the approval? If not, he has a contract he needs to abide by. If he files BK, someone could petition the BK court to allow the sale to go through while still being handled by the BK Trustee.
Also, talk to your broker - I suspect you can inform him that the Commission has been "earned" and you expect to be paid. He should not forget to include you/your broker on the BK Filing. Consult with an attorney and see if you can place a Lis Pendens against the property so you record your intentions and possibly get paid something by the BK Trustee as a creditor.
You were taken advantage - he knew exactly what he was doing - he was just buying more time and doesn't like that it happened too quickly for his schedule.
I expect you will see legal action from the Buyer as well.
Thom Colby
Broker
Newport Beach CA
-
Permalink Reply by Tni LeBlanc (805) 878-9879 on
-
Buddy, you need a lawyer now not Short Sale Superstars. Sorry this happened to you. Go get some legal advice.
-
-
Thanks again Shannon. Thanks too Thom. Finally, thanks Tni, i have contacted Realtor legal line twice and already know implications, consecuenses and possible liabilities, however i wanted to hear other stories, and so far has been good. Thanks!
At the moment we are moving forward.
-
Permalink Reply by Ellen Kirwan on
-
I think if the approval letter was in line with the purchase contract and released deficiency then the seller is still bound by the contract and the buyer would have recourse. This happened to me as the seller wanted to continue to collect rent. He came around when he received notice of Trustee Sale. Just closed this last week!
-
Permalink Reply by Will Pollock on
-
This has happended to me several times. Either the servicer includes the seller in their robo letter campaign to entice their distressed borrowers to apply for a mod (even thought that borrower may have previously been declined or presented with a mod offer that acutally would have INCREASED their PITI per month, or they hear from a friend or relative or co-worker who saw on the morning news that the lenders are modifying loans right and left. They cling to any hope that comes along, no matter how remote the possiblity. I always ask up front, prior to the listing agreement, if the borrower has attempted a loan modification with the lender and, if so, what was the outcome. This information comes in handy when the seller has a last minute change of heart. Here's some tactics I use when faced with this situation:
1) Calculate the interest rate required to bring the P&I on their principle balance down to 31% of the borrwer's gross monthly income using a new, 30-year term. In most cases, you'll get a negative number. If it's anything less than 2 or 3% the lender won't mod the loan because the loss on the loan would too large. If it's a negative number, it means the lender would actually be paying the borrower to borrow the money. Then explain to the seller that lenders consider the financial feasability of modifications using this parameter and even the US treasury doesn't expect HAMP lender participants to modify below a 2 or 3% rate as that would be too much of a loss to require the lender to take and the HAMP subsidy would be too expensive for the government.
2) Remind the seller that, even after the modification, he'll still owe way more money on the loan than the house is worth. "Would'nt it be better to be rid of this upside down situation on this house, do the short sale and in two years become eligable to purchase a house at today's market value with a loan and a payment that makes sense for your family's budget?
3) The nuclear option ( I use this one when #1 and #2 don't work and it's very effective). Send the seller, via certified mail, a demand for payment for services rendered (the amount of the demand is for the ENTIRE listing fee/commission, not just half it). Include with the demand a copy of the listing agreement highlighting the language regarding at what point your commission is considered earned and payable. Explain in the cover letter that you intend to exhaust all remedies available to you in civil court for payment. Also explain that the buyer with whom the seller is in contract may also have civil court remedies for the seller's breach of that contract.
I know this sounds like harsh teatment, but a contract is a contract. We exhaust a lot of resources to pull these short sales off and the time to change your mind is NOT after you are
in contract to sell and have obtained a SS approval.
-
Permalink Reply by Damon Botticelli on
-
The new FTC ruling that went into effect on 1/31/11 requires 2 new disclosues (one at the time of the listing, the other to accompany the short sale approval when it is received) which allow the seller to "not accept" a short sale AFTER the approval letter has been issued. If the seller does not "approve" the approval then no commission is due. Listing agents should be incorporating these disclosures into their listing agreements and have similar provisions in the purchase agreement to protect the seller in case they choose not accept the approval.
I'm glad to hear your deal is back on track, but be sure to get the new disclosure signed. We (short sale agents) have to choose our clients carefully (I'm learning) or we end up doing a lot of work without getting paid.*see http://www.realtor.org/letterlw.nsf/pages/0211mars?OpenDocument&... or just search ftc at realtor.org for info on the rule and how it relates to short sale agents.
© 2024 Created by Short Sale Superstars LLC.
Powered by
**********************************
like buttons