Thread: Seller is asking for release from contract.

People please chime in if I am wrong, but it is not legal for the bank to garnish any wages from the seller. The only recourse the bank has is the home itself so I think that you are just getting smoke puffed up your butt from the bank or you are getting bad advice from someone. If the bank does not want to take the short sale, they can foreclose on the property and pay 40-75k in fees to process the paperwork and court fees, etc. Sounds like you have an over zealous bank employee telling you the wrong info. I would try to speak with someone in the loss mitigatioin department regarding this and find out who is assigned to this property.

good luck

rob

Just to clarify, I have not heard anything from their bank. All the information I have is from their Realtor.

I will now try to speak with someone from their bank.

Does your buyer have an attorney yet? If so I would bring the attorney in on this one, and let them start pulling the strings on this. Most of the attorneys will have contacts with the firms who do the foreclosures in Delaware, and likely will be able to get you better answers than the sellers REALTOR.

I am the buyer and no I don't have an attorney yet, and to be perfectly frank. I cannot afford to hire one for any length of time.

Excuse me if I sound terse it is not my intention, this has just been really frustrating.

The other agent is just blowing smoke...they probably have a much better offer in the wings...that would be my guess

I have to admit I have only heard of this happening one other time and it was in a real estate forum as well. The question that comes to mind is if the bank is not willing to forgive the total loan amount... does that mean the seller/listing agent did not convince the bank that there was a hardship for a short sale? I think there is something going on that you are not privy to know. I am not so sure that there is a better offer in the "wings," but that should be easy enough to verify by asking for proof of bank's rejection of your offer. Once you receive that, then I guess I would sign the release of contract, as that is the right thing to do. Make sure if you have an escrow check on this, that you receive it back at the time you sign the release paperwork.

We tried to get to the bottom of this and after days of getting the runaround (which included the seller asking for an additional sum of money, which would mean that we would pay more than the asking price), the listing Realtor said that the seller was refusing to stick to the contract and we were out of luck.

We are getting our earnest money back and looking at new properties.

I know this thread is over a month old, but for the benefit of future readers one short comment:

Once the seller signed a sales contract it is not his option to decide if he wants to honor the deal. That time was before the acceptance.

The seller probably signed a contract with "specific performance" That means he has the obligation to sell this and only this house.

I am not sure about the implications of a short sale or if that changes anything? Maybe somebody else can chip in and enlighten me.

NO short sales where I do business. Aspen Colorado.

I'm hearing and learning more about this all the time. There are some instances where the lender will accept an offer but not forgive an outstanding balance from owner/seller. Seller may have assets elsewhere to offset balance owed. Lenders are not forgiving debt just because the seller doesn't want to pay anymore. Lender may even force a sale or refinancing of another property if it has equity to pay them.

Short sales may be long, drawn out and difficult to process for all parties involved since there are a lot of questions on how best to handle them. You are doing the right thing to just move on and find something better.