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need help
We made an offer on a house. The offer was accepted. Three weeks prior to close, the sellers learned they owed more than money than they asked for the house. They did the paperwork requesting a short sale from the bank, however, our contract was never modified, nor did the sellers request a modification. We offered to let the sellers out of the contract so we could find another home, but they do not want out.
We are living in temp housing, which ends next week, our household goods are to be delivered from MO three days after close and we have no idea if the sellers will be at closing.
If the sellers are unable to close on the designated date, what rights do we have? We will be charged a delivery fee if we do not have a house to deliver our household goods, temp quarters is almost twice what our house payment would be and we have already paid for inspections, appraisals and a survey.
I understand that many home owners are having a difficult time.
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02-18-2009, 07:37 AM #2
Fixer Upper
- Join Date
- Jan 2009
- Posts
- 45
Tough spot to be in. There are two directions to go here.
1. If you still want the house, then you'll just need to wait out the Short Sale process. Unfortunately the short sale approval could take 45 days or so from the time the short sale package was sent in, and you won't know the outcome till then. Worse, if whoever is handling the short sale doesn't know what they are doing, approval could take even longer. Based on what you've said about the situation, I would guess the odds of the short sale being approved are probably high, but I have very little information to go on.
You could also tell the seller that if they don't close on time you will incur the added expenses, and if they are unable to close by the contract date the contract needs to be ammended (do it now) to have the seller pay your additional expenses. It won't be their money, their lender will actually be the one paying it. Whoever is handling the short sale then needs to send a new HUD to the lender reflecting the additional expense. The lender will likely turn the expense down at first. But if they are told you won't close if the expenses aren't paid, it is very possible they will. If I were handling the short sale for you we would very likely get them to pay this.
2. If you don't still want this house, look at the contracts default clause and follow what it says for getting out of the contract. You will no doubt have to wait for the closing date to pass, give notice to the seller of default, and after a time period, probably 7-10 days (read the contract), the contract will likely become null and void with earnest money returned.
Of course in this scenario there is no chance to recover your additional expenses. You could right now go and find another property, sign a contract, and close as quickly as possible, but keep in mind that you then still have the first contact that you are legaly bound to perform if you cannot escape through the default clause. So it could get a little hairy.
You didn't say whether the property was listed with a realtor. If it was, this points out how sooo many agents don't really understand the market we are in, and don't understand how to handle short sales. When taking a listing these days, we should start with a net sheet virtually every time, so we can identify the situation right from the start. Again, assuming that this property was listed with an agent, think of the wasted time for all parties (the agent included), that could have been avoided by simply identifying the situation up front.
Chris
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