Real Estate Blog - My Short Sale is approved for the third time...now the sellers backed out!

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My Short Sale is approved for the third time...now the sellers backed out!

My Short Sale is approved for the third time...now the sellers backed out!

It seems like I'm always putting out fires but I guess that's the business we choose.

You might ask how this is possible? I had this short sale that I've worked on for probably 7 months. The first two times the bank approved the deal in writing but both times the buyers couldn't get qualified. We were told twice that the buyers were approved by their lender and even showed proof of funds but they still couldn't get it closed....that's another story.

This time we get another buyer and throughout the process I felt pretty confident that this one would make it. The Realtor and the buyer and the lender were all willing to cooperate and supply any updates to us.

We were told by the lender that we would get the approval within 4-5 weeks which we did. And then the nightmare started. This transaction was an FHA loan and the seller needed to execute a required document that I had sent after the contract was executed. I was calling them almost everyday letting them know that the lender required it back fully executed but my clients (The Sellers) weren't returning my calls!

That got me a bit concerned but I kept trying. Maybe there was a family emergency and someone was sick or maybe someone even died and I figured they just didn't want to deal with it so I waited another week. I finally was anticipating the approval any day so I picked up the phone on a Saturday and blocked my phone number just to see if they were avoiding me. Well of course when I called...they picked up the call!

It turns out that they've decided to file bankruptcy because they are worried about the tax implications. They said they don't fall under the law that usually protects you if that property is their primary home.

They had originally lived there for 2-3 yrs yet they feel they don't fall under those dates. As of a week ago.... the buyers are now going to take legal action and sue for specific performance. I doubt they'll win...after all....the first lien holder gets anything awarded and if there's anything left .....it probably won't be much of anything. They want to close and they're ready.....willing and able.

I'm not sure what type of legal advice they're getting but I just hope they know what they're doing.

For more information please contact Neal The Real Deal Bloom-Realtor® /Keller Williams Properties

1625 N. Commerce Parkway,Suite 105

Weston FL 33326

(954)608-5556

Posted by Neal Bloom-Realtor ® Assoc.-CRS-Weston FL on 06/11/2009 08:03 AM

Comments (13)

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Originally posted at: Weston Florida Real Estate Blog, Neal"The Real Deal"Bloom : My Short Sale is approved for the third time...now the sellers backed out!

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13 Comments on My Short Sale is approved for the third time...now the sellers backed out!

JUN

Some folks just cannot resist spinning wheels. Where on earth are they going to get an attorney to represent them in a Specific Performance action for less than a $10K retainer???

Neal - Many sellers in today's market are hoping that all of the mortgage reform will help them stay in their houses. In March when many of the loan modification programs were announced we had an overwelming number of deals fall-out due to sellers backing out. It seems to be a sign of the times.

Neal Talk about a nightmare!!! Good Luck

Neal - well that's a story for the books. And I suspect oone that others have experienced, in some manner. Ugly tuff. So much wasted time and effort.

Jeff

Wow, the deal that keeps giving. Sometimes you just gotta wonder what people are thinking. Or not.

Neal - Interesting. I haven't heard of this before. Then again, there has been a lot of stuff that has happened in the past year and a half that I haven't seen before. As you wrote, I too hope that they know what they are doing.

Neal,

Will you or your company be drawn into any legal dispute if they go forward?

Rich

Lenn,

I'm pretty sure the sellers are claiming that they have no money so I doubt they'll do anything...they are already going to be sued by their lender. The buyers already sent me a copy of their second letter and they have retained an attorney.

Laura,

They haven;t been living there for a long time and were advised they wouldn't fall under the primary protection act.

Jeanette,

Oh so true.

Jeff,

It's usually the other side ...I just hope the whoever is steering them that way is doing it in the sellers best interest....I'm not sold on it though.

Susan,

I was a bit surprised.

Jason,

Well it's happening...maybe less than the buyers but it's happening.

Rich,

My company can't be drawn into it...we have no liability and both sides agree that I did my job by bringing them together. I didn't decide this...they did. I'm sure there was another persons influence that they based their decision on. If the transaction ever closes...I'll file a claim.

Neal,

That sounds like a tough one to take. Sometime Sellers do not understand that Realtors are trying to do what they are hired to do and they should be informing you what they are doing so know what to expect instead of getting blind-sided.

Neal this place is jinxed my friend. Got to give you a lot of credit for having stuck with it that long.

JUN

Neal,

These types of stories are all too common nowadays. Anyone even remotely connected to a property and its short sale can throw a wrench in there and ruin the whole thing.

JUN

Neal - Do you have a cancellation clause with an amount payable to you? They have defaulted. Is the buyer going to sue?

JUN

Wendy,

No cancellation for the sellers and they know they defaulted....the buyers could walk but they wouldn't sign off on their escrow. The sellers sent one but the buyers are pursuing legal action. I told the buyers they have a very slim chance of winning because the sellers will be sued by their 1st lien hold who will get paid any damages if there is any and then their second gets next leaving the crumbs for the buyers. I'm not involved at all unless it does close without my knowledge ....then I'll file a claim for the commission...sellers are aware of all this and they told me on the weekend that their legal counsel advised them not to worry. The only good part is both parties know I did my job to get it approved but that doesn't compensate me for all the work put into it.

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