Hello All,
Looking for any input. Short Sale: BofA 1st and Greentree 2nd. All cash offer was received on 8-15-12, the buyer is the broker who's being represented by another agent in his office. RPA stated 15 day escrow. Sellers accepted. Escrow has been opened, BofA gave an approval until 10-11-12, Greentree approved 10-2-12. The selling agent has ignored all communication from our office regarding closing... COE should on 9/29/12. They want to close on 10-11-12 date of expiration for the 1st. The 2nd has said that they will not extend at all. We gave buyer notice to perform, contingency removal... He has ignored... Today we gave a demand to close escrow. He claims his approval is until 10-11-12 asper the first.... His offer said 15 day escrow... The 2nd will not extend... Seller does not want to chance it...buyer/broker says, 'relax, the 2nd is just bluffing'...any thoughts???

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Karla,

       To get the closing table and have the buyer not close as quickly as possible is always a stressful situation. When were the approval letters issued? Where they issued good for 30 days even though it was a cash buyer? If so the lenders may take that as the buyer can't close as we all know a cash offer shouldn't take that long to close. Is there a foreclosure sale date set on this property? Who is communicating with the Green Tree negotiator? Have any extensions been granted yet? The buyer's agent is foolish to assume that they are "bluffing", but what is the exact reason the 2nd is stating no extension will be granted? I wouldn't say an extension with the 2nd is impossible to obtain, it just may take the right communication and or contacts at Green Tree. At the company I work for I see time after time negotiator/closing officer stating that an extension will not be granted and when you push the right buttons at the lender or reach out to the right contact many times things can change.

Sounds like a potential flip in the making. They may not have secured their end buyer yet. What other reason would they have not to close.

I was just about to say, sounds like they don't really have the money yet. But Scott, your idea might be more on track, even though there is probably a required seasoning. Karla, was the purchasing party an entity(LLC or land trust) that could be transferred, without triggering another deed transfer? I think, in any event, put them on notice that Sep 30th your seller will be putting them in default, and claiming any deposit. The Buyer/Broker is supposed to Not be an idiot, so he knows the contract rules, and the approval form the lender is not "his".

Youre in a pickle and I've been there.  I've had buyers write "cash" offers that weren't really cash.  I'm in that situation now.  Buyer gave us bank statement showing funds, but now is not closing because he initiated an equity line on his private residence and wants to close it before he buys the house we also have approvals for until the middle of October.


My experience so far?  You can demand all you want, but if the buyer says they aren't closing until XXX they aren't closing until then, so short of keeping his deposit and finding another buyer you have to sit and wait it out no matter how much you don't like it.  I would be BS if GT didn't issue another approval either.  I would try to stress that they CAN'T close on 10/11 because you won't have second lien approval by that time.  Push them to close 10/2 or sooner, or keep their deposit and find another buyer.

Sorry, I've been through this TWICE now and it SUCKS.

The contract outlines the terms of the deal and when the transaction is supposed to close. It also outlines the remedies for default. You can't force the buyer to close.

The seller can choose to wait and see or they may be able to kick the buyer to the curb and find another one. Hopefully you have a good deposit in escrow to be able to use to put some pressure on the buyer.

xx

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. 

Thank You all for your helpful comments. Immediatly, after the buyers agent, let my agent know that they weren't going to close as per the contract, I had the l/a send out notice to perform, contingencies removal and demand to close escrow. Yes, this is an LLC(I'm sure buying to flip) it's a small r.e office where there are 2 agents with this broker, they act as the buyers agent for him. The 2nd gave approval before the first. Infact, while the l/a was still negotiating the 1st, the 2nd did an extension. Then it went into a 15day escrow, and they're saying they can't close. Sellers are canceling on the non performing buyer, no ifs or buts.... Now the buyer has called himself and ask if he can pay the 2nd since its 20k...(thought he said "2nd was bluffing"..Ha!) he told the l/a that the rest of the $ will be ready shortly after...

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. 

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.

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.

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