Northern Virginia Short Sale Contracts: Who is the Seller?
Northern Virginia short sale contracts can certainly be confusing, but one thing is clear: The sellers are the invididuals listed on the Deed. This is not a foreclosure sale. It is, often times, a pre-foreclosure sale. However, the bank has not repossessed the property through foreclosure.
It's not at all unheard of for buyers and sellers to not understand this, but when a member of the Northern Virginia real estate community gets confused...well...let's just say that we can have problems.
I recently represented home owners who were selling their property in a short sale. The buyer patiently waited for the bank to provide short sale appproval. After several months, the bank did! However, the short sale approval letter did not meet the definition of short sale approval in the Northern Virginia Regional Sales Contract. Therefore, the sellers (who were being asked to contribute cash at closing, and being told that their lien holder would pursue a deficiency if the short sale closed), were able to provide notice to the buyer that the short sale approval was not gained.
This whole series of events must have short circuited the brain of the buyer's agent. He spouted off information as fact, that was nowhere in the Regional Sales Contract. He told me that the lien holder was now the seller in the contract and that the home owners had to comply with whatever terms were brought forth from the lien holders. This buyer's agent is now instructing his client to speak with an attorney to sue the lien holder for not performing under the terms of the contract.
This buyer's agent has not yet bothered to read the terms of the contract to his client that pertain to this situation.
As with any contract for the purchase of real estate, all the terms must be in writing and agreed to by the parties involved. Nowhere in our contract was the lien holder mentioned as a seller, nor did they assume the duties of the seller. What was negotiated between the seller and their lien holder was between those two parties. The lien holder is no more a party to this real estate contract than a home inspector, or appraiser would be. Those are also folks that are involved in contingencies to the contract, but are not parties to the contract themselves.
When buying or selling a short sale, it is of the utmost importance that your Realtor first, and foremost, understand the contract that will be the instrument of your purchase or sale. Without that vital bank of knowledge, your Realtor is not giving you accurate information on which you can rely. However, they do provide those of us that know better, with great blog post material.