For many of you buying short sale properties is nothing special. you practically do it in your sleep. For the rest of you who have never done this before I advise you to make sure you are working with an agent who is seasoned in selling short sale properties and please heed their advice. It could costs you thousands in the end if you don't.
I ran across a situation with one of my colleagues who was selling a short sale property to her clients. It was the first time they have ever attempted to purchase a piece of real estate and they were so excited. Since the market had crashed and home prices came tumbling down they could now afford to purchace a cozy home in their price range in a nice neighborhood. They couldn't be happier.
After looking at about a dozen homes, their Realtor (my colleague) had finally found them "the one". It was a short sale property that was being sold by a trust for the owner...the trust consist of 7 people who were investors. They quickly rushed back to her office to write the contract up along with the short sale addendum. They gave their Realtor a good faith deposit to be place
d in escrow to show the bank it was a solid offer.
Their offer was presented to the Trust and the trust insisted that they remove the short sale addendum stating that if the response time from the bank goes past a certain time frame (2 months) her clients were released from the contract and were to be given back their deposit. My colleague insisted that her clients NOT sign the contract without that addendum and she warned them that if they did it could be difficult to get their deposit back if they changed their minds.
Needless to say, her clients did not heed her advice. They were so excited to get the home they signed without the short sale addendum. Three months went by and still no response from the bank on their offer. Nothing. Her clients decided to start looking at other properties as a back up plan. They find another home that is now "the one" they have to have it but they can't place an offer because their good faith money is tied up in the escrow account for the short sale property they bid on.
They call their Realtor and ask her to try and get them released from the contract. She calls the Trust and explains to them that the process is simply taking to long and her clients can no longer await a response and need their deposit back. The Trust refused to release their deposit and thus began a two month battle for the money. In the end the money was finally released back to the buyers die to the law that states that taking out a time frame in a contract no longer makes it a binding contract because all Real Estate contracts have to have a time frame in them.
The buyers wasted five months of their time because they did not listen to their agent in the beginning. Luckily there is a happy ending. The buyers ended up getting the house they found and lived happily ever after.
The End
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