Thread: Submitted offer but lost interest, can I back up?

You don't mention what state you are in. In Tampa, FL I had this very thing happen to my seller. A contract is between the buyer and seller. The 3rd party, the bank holding the note on the short sale property, is to the seller what the obtaining a loan is the buyer. A contingency that needs time for the 3rd party to respond, get their part of the deal done for the closing. The unfortunate part of this whole process is that banks don't have to work within the timeframe we (the buyers, sellers, agents) put on them. Similar to; if you have ever bought a home before and didn't get the mortgage done in the time allotted and had to write an extension so you wouldn't be out of contract.

There are other factors here though. Are there multiple offers in play? If there are, that's good. Ask your realtor to write a "Release and Cancellation of Contract" sign it and get seller to sign. This will get you out of the contract once seller signs it and you get it back.

One thing to remember when you move on to the next house... Contracts are binding and should not be taken lightly, even in a short sale where there is a lot of confusion about the whole process. Short sales and pre-foreclosures take more time than most buyers have or want to wait, but if you have the time and find a really great deal it is worth the wait. Don't gamble though, once you find that home, put your best foot forward because you usually only get one chance to make an offer as there usually isn't a counter coming from the bank.

I live in southern california. I don't know if there would be any other offers on the house. Basically you are saying that if the bank accepts my offer on the house (short sale) I am legally obligated to buy it, correct? This really puts me in a dilema. What would happen if I purchase another house in the meanwhile and a month after I get a response from the bank on the short sale accepting my offer? More than likely I would not qualify for another mortgage even if I wanted to buy it. Would this be a factor that would get me off the hook or will this just get me in trouble?

gregory,
It's probably time to go see a real estate lawyer. Have her/him go over the contract and tell you what you can do to get out of the contract.

Your agent should have included a Short Sale Addendum that allows you to back out at any time up until Bank Approval of your offer.

I hope you did not put up any money. I never have my clients place any money into escrow until the bank approves. No sense in having money sitting in an escrow account collecting dust for 3 months while the bank deals with their issues.

As always it's about protecting yourself going into the transaction that will protect you going out.

Agents knowledgeable in Short Sales will ensure their clients are protected against these issues.

On another note. Short Sales are the best opportunity to get the lowest price. For those willing to play along will benefit by getting house they like at a great price. As always, factor into your offer what you feel the value of the property will be in 3 months. Help the selling agent by providing comps and support as to why the value is what you are offering. Banks are not giving away homes...

Sorry, all you 50% discount bottom feeders...

Every states laws on Real estate are different. What CarlaM stated about florida is correct. I have a Lic. in MA and the laws there indicated that I am bound to the contract after I put down my deposit (which is different than my earnest money). You will need to speak with your agent who should be able to explain all this to you. If he/she cannot, then you do not have the appropriate respresentation that you will need for this transaction.