Dear Michael: We are purchasing a short sale. Our agent told us that our offer was accepted by seller and chosen to be submitted to the bank. Now we find out that the property is in foreclosure. According to our agent, the negotiator said this is one of the most complex transactions she has ever seen and they are doing everything to get approval with us. At this point the bank can accept our offer, reject, or counter it. Is there anything we can we do to speed up the process and secure the house?
Answer: Short sales can be a lengthily and a complicated process. You are correct that the seller’s bank (the mortgagee) can either—accept, reject, or counter your offer. No matter what their ultimate response is, the average wait time to hear back is between 1 to 6 months. To answer your question, unfortunately there is nothing more you can do in order to expedite the process. Though it is not as common as a few years ago, on occasion, properties pending a short sale end up going through foreclosure. The Loss Mitigation department at a bank handles the short sale negotiation and a completely different department, the eviction unit, will handle foreclosures. Most often, they are not even in the same state, let alone the same building. These two departments typically don’t communicate with each other, so it can happen that the eviction team will complete a foreclosure on a property while the seller (or their representation) is actively negotiating a short sale with the loss mitigation department. This is unfortunate, but it does happen, though not as often as previous years when short sales were new to the market. Banks have come a long way since then simplifying the process and trying to make it easier on all parties involved.
Dear Michael: We signed a contract on our home and three days later the buyer, whom we had not met, showed up at our door unannounced and said “Hello, I just bought your house.” My husband invited him in and talked to him for 10 minutes about the house, area, etc. Was this the correct thing for the buyer to do?
Answer: Yikes. Although I am sure that the buyer motive was one of enthusiasm this action was definitely not appropriate conduct by the buyers and probably an uncomfortable situation for you and your husband. I can certainly understand the excitement for a buyer looking to purchase his impending home and meet the sellers, but the buyer should not have stopped by your home unannounced without your agent present, no matter what was his/her intentions. The risk factor when not having your agent present is in regards to the conversations and verbal disclosures discussed between buyer and seller. These conversations could very well end up in front of a judge hearing both parties stating “but your honor he said/she said.” What the buyer should have done is contact this/her agent (or your Realtor if they didn’t have a buyer agent) and ask to schedule a time to see the home. Buyers commonly ask to meet the seller’s; however it is not a requirement. If this situation presents itself again: say you look forward to working with them on the pending transaction but politely ask them to call their agent or your Realtor if they want to preview your home.
Dear Michael: My home was in escrow for only four days when the buyer decided to cancel for no apparent reason. The agent said that her kids talked her out of it. Is the buyer allowed to cancel a purchase for a reason other than stated in the purchase agreement?
Answer: No purchase is firm until the buyers have removed all their contingencies. Buyers have 17 days (this can be extended in writing) to remove all their contingencies unless otherwise specified in the purchase agreement. The buyer’s investigation of property condition and approval of all report is the contingency that allowed this particular buyer to cancel the sale of your home. If for any reason at all the buyer disapproves of any report or finds anything physically wrong with a property then the buyer can cancel. The fact that this particular buyer cancelled for no apparent logical reason does not mean that he/she is not within their contractual rights. The buyer’s reason for cancelation may not make any sense to you but is sufficient for cancellation and for the return of the earnest deposit.
Michael Kayem is a Realtor with Re/max Execs serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com