seller breaks contract

**dlon** · 09-23-2009, 06:40 PM

My daughter signed a purchase and sales agreement to buy a condo(short sale) A deposit was given. closing date was to be 9/30/09. she paid for appraisal and obtained the financing. she learned today that the bank that was selling had already sold the unit to the condo association who in turn already auctioned it off. supposedly the realtor selling it for the bank did not know it had already been sold. what recourse might my daughter have?

**Greg** · 09-24-2009, 06:22 AM

The bank is not the seller in a short sale. The owner of the property is the seller. The only way the bank could have sold it to the HOA is if they had a foreclosure sale on the property and the bank bought the property back.

So, in this scenario there would have been 2 auctions for the outcome you mention to take place.

Your daughter is due her deposit back but I don't know about anything else. Buying a short sale is always a risk for the buyer which is why we discourage our buyers from buying short sales.

**Glennet** · 09-24-2009, 07:32 AM

Hello Dlon-

Taking all your information as factual - as pointed out by Greg - your post does have some contrary issues.

You could clear the air a little if you answered the following question.

Who signed your purchase agreement as the seller ?? It sounds like it may have been the bank - but I'm still not sure.

If the former owner signed it - they should have clearly known they were selling something they didn't own - and if were me I would want a pretty good explanation. Also - you should get a pretty good explanation from your appraiser as well - that was a MAJOR point they should have picked up on.

If you were in fact buying it from the bank - it probably was an oversight (these guys are swamped right now) and a legitimate error. However if the bank signed the purchase agreement - you should demand that they refund your appraisal fee and any other money spent by you in attempting to buy this property. The listing broker should return your escrow money at once !!

Good Luck-
Glenn