I got the short sale approved within 2 months.. I really didn't think it would be that quick but now my seller doesn't want to move. The bank has given us one month and she feels thats too much of a short notice. Now, All I could do is wait it out.
My thoughts: I asked the seller how much notice does she needs to have so that she can move comfortable.I did that , now I'm waiting on her response.
Thought 2: Ask the bank for more time. I really don't want to do that until the loan is place from the buyer.
Thought 3: I may loose my buyer if I wait too long .
Does anyone have any thoughts on this one....
Thank you Bryant: I spoke in details with my seller and they wanted to hold out so that they could try and get some money together for moving expenses since the bank didn't approve the HAFA for them.
I decided to email the bank again and see if they would consider some type of moving expenses for them so that everyone could benefit from the sale. I have to wait for the GMAC to get back to me.
Bryant Tutas said:
What does the purchase c0ntract say? That's what dictates the closing date. If the seller doesn't want to abide by the terms then the buyer has remedies that should also be outlined in the contract. The seller needs to made aware of this....firmly. Then it's their decision what to do. Bottom line. They either want to do the short sale or they don't.
This is a tough one Donna. I had this exact situation happen. I was so frustrated but it did eventually work out and it was due to an amazing Chase negotatior. Everyone involved was upset, and it wasn't a quick approval either. It was about 4 months, but when the approval came the homeowner said he wasn't ready. I fault myself somewhat. The email correspondence I got was clear that usually you have 30 days from approval to close but I didn't keep re-iterating it over the phone and I also didn't re-iterate that I would have no idea when or if the approval would come. I have since changed my strategy, but it is tough. Some of these homeowners have nothing, so when it comes time to say, "Ok you have to go," they seem to be in denial in some way.
We ended up getting THREE extensions. We didn't ask for moving expenses,b ut you can always try.
NEVER EVER allow a short-seller to remain in the property after closing unless the new owner has a lease signed and a security deposit. Also, make sure the short sale lender KNOWS the seller is staying in the property - AND - make sure your E&O is paid up to date - you might need it.
Newport Beach CA
A colleague here in SoCal had a transaction last year where a week AFTER closing the former owner (seller) decided they were "not moving" - EVER. It took the new First Time Homeowners more than 7 months to get them out through the eviction process. These First Time Homeowners could not carry both their Rent and their new mortgage so they had to move in with friends while they paid the mortgage for the prior owner to live in their house.
We have to be really careful ! It's getting really crazy out there .....
Rama Mehra said:
Thom, we did one recently where the seller just dug in his heels. There was a lease agreement signed but the buyer was giving them a one week free and the lender knew and signed off on it. It is possible but the only problem may arise if the seller decided that he wants to punch a few walls before he leaves !
Throughout the last 5 years 99.9% of my business has been listing and selling short sale properties for people who have a true and real financial hardship. I always have a blunt conversation with them at the very beginning of the process about the entire process which includes moving out of the property once the Short Sale is approved. I also make sure they are aware if they do not move our as agreed in the Purchase Agreement, they could be sued by the Buyer and their troubles would be much worse.
I've been lucky so far and every one of my sellers have been thankful and have moved on time.
If a seller gave ANY indication they may not be willing to move, I would do the most ethical thing I could and notify the other agent and the short sale lender so the transaction would not close until the seller has agreed to move by Closing Day. That's the Ethical thing to do. Even though each of us represent the buyer or the seller and have a Fiduciary to that party, we are bound by our REALTOR Code of Ethics to treat everyone equally - which to me means making sure no one gets hurt in the transaction.
Since I never represent both sides of any transaction I can focus more on ensuring it all moves ahead smoothly and I can keep all of the parties updated at all times.
Broker / Negotiator
Newport Beach CA
Noel Hagen said:
I agreed with Thom. we all have to be really really careful. ShortSale Sellers do not want to move out even they knew they got to move out several months earlier.. Most of these shortsale sellers are not paying their monthly mortgages for months and years. So I don't understand. some sellers do need help but most are just taking advantage of the buyers. HOW Do we prevent this? Do we have something similar to CASH for Keys Agreement Form (with Moveout date, etc prior to close of escrow) and any guidelines from HUD if the sellers do not cooperate what are the consequences for the SS sellers?? Does any one know??
Why doesn't the seller want to move? Does she want more time? What is the real reason?
This has been a fairly common occurrence in our area ... not just with short sales, but also with conventional sales. It is common among renters in multi-family buildings that get sold. We call it "Cash for Keys". Yeah, I'll move - how much you gonna pay me to go?
I know of new owners that have paid between $2,000 and $5,000 to get a renter out. It stinks if the laws in your state make it really easy for the squatter to stay and hard for the new owner to get them out.