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Lost buyer after verbal approval from bank

Posted by Jo contreras on March 24, 2011 at 2:43pm in Short Sale Discussions
Hi- I am a seller and just got a verbal approval from the bank last week.   Our buyer cancelled the deal and now we have to find a new one. The thing is before  the shortsale approval our house was set to sell on may 5th in auction.  I am desperate b/c due to my job I cannot have a foreclosure on my record. I am trying to see what options I have left, and have put the house on the market. I need to sell this asap, and am looking for any advice or leads anyone can give me. I live in las Vegas, nv, and the house is going for a steal of $55k. That is upsetting enough with the price I can't put my job in jeprody too. My wife lost her job and we are getting by on 1 income.

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Replies

  • Raymond Kennedy April 6, 2011 at 4:10am

    It's an Arms length transaction as long as the friend is not related by family or business. Basically as long as their is no paper trail showing their is a business or family relation there is no duty to disclose to bank.


    Dummy contracts are risky if the bank can prove it but depending on how a contract is written there are many options to get out of the contract on the buyers end without breach. Banks are not party to a contract and can't dictate terms of a contract but only approve or disapprove their loss and costs involved so contractually the buyer is not responsible to the bank only the seller in terms of the contract. The only risk there for the buyer is if the seller decided to hold the buyer to the contract terms. Other risks is if the bank could prove it was a fraudulent contract but I don't imagine that could done easily. 


    Either way be very careful with that tactic, that could be fraud if the buyer is not truly a willing and able buyer and this can be proven that you had knowledge of that.

     

    This is a tactic, just not a very ethical one but we all know it has been done.

     

    Jeff Payne said:

    Walter, unless the "friend" was intending to purchase the property, it is a dummy contract.  Could be a very slippery slope, especially if the bank accepted the offer and the friend did not purchase.  Would you disclose to the bank that the seller and buyer have a relationship?

  • Jeff Payne April 6, 2011 at 3:42am

    Walter, unless the "friend" was intending to purchase the property, it is a dummy contract.  Could be a very slippery slope, especially if the bank accepted the offer and the friend did not purchase.  Would you disclose to the bank that the seller and buyer have a relationship?

  • Vanessa Calhoun April 6, 2011 at 3:30am

    Walter, I'm sorry, but your intentions were pretty clear in your statement. Furthermore, there's no need for us to further this discussion at all.

     

    Have an excellent day!

    Walter Rock said:

    Vanessa, I don't see where I suggested submitting a dummy offer.  I would suggest that a friend, in good faith, submit a low offer and if they get the property, then they got a good deal.  If the bank counter-offers, then the buyer doesn't have to purchase and the foreclosure is postponed.  I suggest that you not make assumptions or give legal advice, unless you are an attorney.  If you want to continue this conversation off-line, then contact me, but this forum is not the place to further this conversation.
  • Walter Rock April 6, 2011 at 3:27am
    Vanessa, I don't see where I suggested submitting a dummy offer.  I would suggest that a friend, in good faith, submit a low offer and if they get the property, then they got a good deal.  If the bank counter-offers, then the buyer doesn't have to purchase and the foreclosure is postponed.  I suggest that you not make assumptions or give legal advice, unless you are an attorney.  If you want to continue this conversation off-line, then contact me, but this forum is not the place to further this conversation.
  • Vanessa Calhoun April 6, 2011 at 3:26am

    Furthermore...here's the link to fraud

     

    1) Buyer misrepresents himself on the offer as he's really not willing to purchase the property

    2) Seller and agent are aware that the buyer is really not willing to purchase the property

    3) Seller and agent sign the document in which all three parties are now aware of the misrepresentation (now a conspiracy) 

    4) Now the document (that is a complete misrepresentation) is submitted to the seller's mortgage company. Yes, the same one in which the seller has previously agreed to not submit misrepresented documents or information (material facts)

    5) All parties have just committed fraud



    Vanessa Calhoun said:

    Yes, Walter, I am a licensed Realtor in Georgia and you're absolutely correct in that it is not illegal to sell a home to a friend. The fraud element comes into play when you knowingly and willingly submit a "dummy" offer to a lender in order to postpone a foreclosure. It's a totally different scenario in which you submit a good faith offer from a willing and able purchaser who happens to be your friend than it is to simply write up an offer from someone who has no intention whatsoever in purchasing a property. It's also very unethical....which is why I asked if you were a Realtor.

  • Vanessa Calhoun April 6, 2011 at 3:15am

    Yes, Walter, I am a licensed Realtor in Georgia and you're absolutely correct in that it is not illegal to sell a home to a friend. The fraud element comes into play when you knowingly and willingly submit a "dummy" offer to a lender in order to postpone a foreclosure. It's a totally different scenario in which you submit a good faith offer from a willing and able purchaser who happens to be your friend than it is to simply write up an offer from someone who has no intention whatsoever in purchasing a property. It's also very unethical....which is why I asked if you were a Realtor.

  • Walter Rock April 6, 2011 at 3:07am

    Vanessa,

    Can you explain to me how that is fraud?  I've never heard that it is illegal to sell your home to a friend?  Are you a licensed Realtor?

  • Vanessa Calhoun April 6, 2011 at 1:03am

    Walter:

    Are you a licensed agent or Realtor? Just asking since you're telling this desperate individual to commit fraud....

    Walter Rock said:

    Have a friend submit an offer on your property.  Any offer should buy you some time.  Sometimes you can submit an offer within 3-4 days of a foreclosure and stop the process, temporarily.
  • Trina Gonzales April 6, 2011 at 12:31am

    Hi... do you have your home listed with a Shortsale realtor?  You still have time to find a buyer and get a postponement of the foreclosure.  You should really have a Shortsale specialist help you.  If you haven't already, post here and I'll refer an agent for you in Las Vegas.  Best of luck...

     

    Trina Gonzales

    Fontana, CA

  • Walter Rock April 4, 2011 at 2:38am
    Be careful.  I have heard more than one story where someone paid the bank a large sum of money only to get foreclosed on anyway.  By this time, the foreclosure is probably being handled by a law firm.  You may want to find out which one, ask them for the reinstatement amount and get something in writing that the loan is being reinstated in exchange for payment.
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