Sellers threaten to cancel short sale
We're the buyers and currently in escrow on a bank approved short sale. We set a close date that both buyer and sellers agreed to, deposited earnest money. We made arrangements to move from Texas to San Diego--hired movers, sold our house, bought plane tickets, and made appointments to have repairs done, etc. A while later the sellers want to change the escrow close date, we said no, now they are threatening to cancel the sale.
The only line that speaks to this in our signed sales contract is about earnest money, which is in the escrow account already. My real esate agent advises just to concede because otherwise they will cancel. When I ask on what grounds? Wouldn't they be in breach of contract? My realtor says she doesn't know she just "knows they can cancel if they want to."
Replies to This Discussion
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Permalink Reply by Ghana Bigsby on
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Huge benefit?
I did not know that. I better get cracking on polishing and creating my online presence. Thank for the forewarning.
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Pam,
This is not a Florida market. A two week delay (in of itself) is not uncommon or unreasonable in a California distress sale. Don't be surprised if they ask for more days. As long as they can get an extension on the short sale approval to accommodation the time.
Anything can go awry as is here. You cannot make the sellers move out of their house before they are ready. Even after a foreclose they can stay as short as another 90days before being evicted by the bank. That's one reason why banks offer cash for keys to get early position of the property.
Again there are many ways for the distress sellers to kill this deal and stay in their home longer than what is being asked. They will move, but on their own terms.
California real estate laws favor protecting the distressed homeowner.
Again I suggest you find a skill negotiator to help come to an agreement.
Ask any reputable Ca real estate attorney what they think. They may even be able to help you negotiate a solution.
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Um seller leads? Advertisement? Interesting.
I thought this was a forum for peers to help each other.
When does comments based on general California state laws become advertisement?
All posts I see here are from agents and one buyer with an agent.
I will take your comments as a complement to my style of writing.
When making a decision to act make sure it is your decision. For you will bear the rewards or the losses of your actions.
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Permalink Reply by Karen Summers on
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I am not judging the seller as to why they are in a short sale, I understand everyone can fall on hard times. However, it was the seller who decided to contact the bank for short sale approval, the seller decided to list the house for sale, the seller signed the purchase contract. So I don't think I am asking much when I expect them to do what they say they would do--sell the house.
I signed a contract to buy, they signed a contract to sell. I am a woman of my word, and I don't throw a fit and threaten to cancel to get what I want. We signed a contract, we BOTH agreed to a close date, I am just asking that they stick to their word.
I believe they are dragging their feet. They are now asking for 2 weeks or they will cancel. They say they found a new place to live and it's not available until then. They knew the close date that we had both agreed on, they should have found a place available in that timeframe.
In the meantime, I have sold my house in texas, hired movers and bought plane tickets. As my realtor tried to explain to them it will cost us around $5000 to put all our stuff in storage, change our airfare, and stay in a hotel with 4 kids under age 6 for 2 weeks while the sellers live rent free in a home they already agreed to sell to us by a certain date. They could care less. That's just not ok. I'm not turning around and telling my buyers they need to wait another 2 weeks so I can stay in my house, I gave them my word and I am going to keep it. (I asked and they said no, so I a not pushing it, after all we agreed on a close date)
In other areas of business, money=power. I am not trying to sound high and mighty, but I'm putting down 50% cash offer, paying all closing costs and the seller is contributing $0 and now they are asking me to spend $5000 so they can live rent free for 2 more weeks.
Like Pam said, the bank is giving them the opportunity to short sale before they get foreclosed on. It is not the right of anyone to get thier short sale approved and have a sale go through, and they should count thier lucky stars.
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Again it is their opportunity to do as they want.
Sorry to hear your agent did not help you plan for such a hiccup. I see your plans have little flexibility for change without causing you a great deal of money.
Based on what you have now presented, I encourage you to get your agent's broker involved. A season and/or skilled agent can negotiate a solution specific to the current issues that will not be so costly to you. It sounds like your moving day plan to move from one state to another does not mix will with any volatile transaction. Even in a non distressed transaction I would recommend a backup plan for when things goes bump. Especially with the high cost of relocating long distant. My relocation families are very happy with how I assisted them in planning their state to state move.
I hear your frustration.
This does not change the fact this distress seller has the upper hand at this time. Even if it was an all cash offer. Hopefully your agent/broker can help come to an acceptable solution for you and the seller.
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I'm not sure what we could have possibly planned as a back up besides our current back up of hotel and storage. The sellers picked the original close date in the first place and the listing agent assured us they were ready to sign and move. We had to sell our house and had a great offer and the two close of escrow dates lined up pretty well.
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Karen,
THe sales contract is between you and the seller. The bank has negotiated its instrument, not sold the house. The bank does NOT own the property or have any current right ot property or they would own it and it would be REO.
As to not paying a mortgage in a few years. Maybe you have not been affetd byt the 12-14% unemployment or the unemployed that are not inlcluded in that number-in some areas as much as another 20%! Many of these are the same people that purchased at market peak after obtaining a new job in another area.
These people never wanted not to pay, they thought they were purchasing a house truly of the value they purchased at. That house was never worth that value except to those pocketing the money, someone else earned money that they should not have earned and left that person holding the bag. This was similar PONSI scheme at its best with regard to those people, the difference being in ponsi scheme one takes a little money from a lot of people. This time they took a LOT of monay from a LOT of people!
Just thank God that you aren't one of those affected by purchasing for a value and having a good job one day and litterally 3 months later no job and a house that is worth 1/4 of what they paid.
If the seller is having to rearrange thier life and thier credit is sunk...let them have a little peace of mind as the prepare for thier new ife. They are in a LONG uphill battle to recovery that may never happen in thier life times.
You on the other hand have a good job, still good credit, and are probably purchasing at a HUGE discount from that they paid or even what non-distressed homes sell for. You are being blessed, so give thanks and bless those that have been less fortunate. Give them a thank you when they leave and maybe a dinner at a good restaraunt..they may not have had a good meal out in years. Show compassion for thier plight. Chances are they did nothing to cause it. That is why we have a short sale system to begin with.
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As I said earlier, I am not judging them for being in a short sale, I understand people can fall on hard times, but the seller is the one who contact the bank to short sell, the seller is the one who listed the house, the seller is the one who signed the purchase contract and the short sale approval, and the seller is the one who chose the original close date. All I am asking is that they keep their word--sell the house--and keep the original close date. Just because you have fallen on hard times does not mean you get to breech a contract and cost me thousands of dollars. Even people in hard times should act with ethics and integrity.
And you should also know my bank qualified me for a loan $200,000 more than the house I am buying. I looked at my budget and said there is no way I can afford that! I would upside down so fast! So there are still a lot of banks out there not doing well by people and consumers need to take a look at their finances before they buy to see what they can actually afford. These "ponsi" schemes are still going on.
My concern is they have already asked to change the date 3 times. What is to keep them from changing it again? How long do you expect me to just stand by and let them push closing off? Another week and another week and another week? Just because they fell on hard times they get to push the close date off indefinitely?
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Permalink Reply by Kevin - Greenville, SC on
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Check with a Local RE Attorney.
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Permalink Reply by Jeff Payne on
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What is the closing date on the short sale approval letter?
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the closing date on the short sale approval letter is the original close date that we want to keep. The sellers told the bank this date before the bank drafted the short sale approval letter and sent it to us. The sellers chose this date before even consulting us, we agreed, we all signed documents, and now the seller is asking the bank (and us) for a 2 week extension, which the listing agent seems confident they will get from the bank.
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Got it. The sellers agent better have a back up plan if they do not get the extension. Your moving company may be able to keep your items in climate controlled storage.
I hate that this is happening but it is the nature of the beast. Seller thinks they hold the cards because they have most likely gotten away without paying their mortgage and the bank approved the short sale.
Have your agent have a talk with the sellers agent and stress that you have an closing date set already.
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