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Los Angeles, Other/Just Looking in 90046

I have been in escrow on an unapproved short sale, waiting for bank approval. Now the bank is about to approve and the sellers want to cancel and

Asked by Los Angeles, 90046 Thu Jul 8, 2010

rent the house out. Can they do this at this point in the game, i want the house and do not want them to cancel. Escrow sent me a cancellation notice. What can i do?

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If the short sale is not approved, then unfortunately, you are not really in escrow. Escrow may have been opened, but the contract for a shortsale is contingent upon the lender approving the offer you made with the home seller. If there is no approval, then the seller is not obligated to cooperate and can change their mind at any time. I specialize in shortsales and have seen this many times. Sorry. Always happy to assist.

Sincerely,
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills East
9388 Santa Monica Blvd, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0670 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
1 vote Thank Flag Link Thu Aug 5, 2010
No knowing all the details--what is your agent suggesting--you may wish to consider consulting with an attorney who specializes in real estate, have all related documentation reviewed and see exactly what options you may have.
1 vote Thank Flag Link Thu Jul 8, 2010
You should not have "OPENED" an escrow on an unapproved short sale. If the short sale was NOT actually approved your escrow is null and void.

Move on to another property. There is NOTHING you can do in this case.

Best Regards,

Kawain Payne, Realtor
0 votes Thank Flag Link Thu Dec 6, 2012
Short Sale is always subject to approval by the short sale lender (seller's mortgage company). Escrow is not official until that happens. The situation may have changed for the seller. I do not think that there is any way that you may obligate the seller to short sell, unfortunately. Good luck.

Sara Mehrpouyan CDPE
Specializing in Short Sale & Foreclosure
Direct: 818-903-2040
Rodeo Realty
Dre License #01712757
0 votes Thank Flag Link Sun Jan 1, 2012
Yikes! If you don't have a good attorney, definitely go ahead and get a good Los Angeles CA short sale agent to assist. Check out -
0 votes Thank Flag Link Mon May 16, 2011
what does your agent say? what does it say on your purchase contract? the seller couldn't accept your offer until the bank approved it. If the sellers can rescue the property from foreclosre they have that right. you basically did not have a contract. I practice RE in California, so I know this, with your offer you should have been provided several disclosures that explained what a short saleis. Pull out your paerwork and look it over.
0 votes Thank Flag Link Wed Sep 15, 2010
The other advice on here to contact a real estate attorney is fine -- the only problem is, is it really worth all the time and resources to pursue this unapproved short sale? Realistically, if the sellers want to cancel, they can, just like in any other transaction. Also, your offer was accepted contingent upon the bank approving the short sale to begin with, so you're not even really in escrow yet. Hate to be the bearer of bad news, but maybe it's better to pursue some other homes with sellers who are serious about selling.

Caroline Choi
Broker Associate/EcoBroker Certified
http://www.CarolineSellsTheCity.com
0 votes Thank Flag Link Wed Sep 15, 2010
Consider this:

If your purchase goes through, the seller walks away with nothing. The lender gets the net proceeds of the sale.

If your seller rents the house, he can pocket the rent until the lender forecloses.

It looks like it’s time for you to move you focus to another property.
0 votes Thank Flag Link Thu Jul 8, 2010
Generally, it's far too expensive to force someone to do what they are legally obligated to do - and it's not clear that they are legally obligated at this point. It usually more pragmatic to move on.
0 votes Thank Flag Link Thu Jul 8, 2010
Hello Buyer, Emily has the best advise and sounds very informed. Do not contact an attorney, they are going to waste your time and money in this case. There are so many variables associated with cancelling a short sale for a buyer. It is very rare that a buyer will cancel however to rent the place out, specificaly because most short sales require the seller to be in major distress which often times leads to them not making a mortgage payment for many months. There are defenitly other reasons involved on this but that short sale addendum that Emily was talking does save the sellers from any recourse.

My best advise is to move on to another listing if the agent representing the seller will not provide you with a clear answer. I deal with so many agents every day throughout the Country and it is unfortunate as many do not properly educate and motivate their clients from the very begining.

There are plenty of other and with time I am sure you will find another home.

Ramin Lavi
#01797965
213-802-1232
0 votes Thank Flag Link Thu Jul 8, 2010
Thats unfortunate for you. I would advise you to move on. Sounds like they made up their mind to keep the house and they have that right. I am short sale certified and I would not advise my client to enter the ring under these circumstances. Look for another listing, that one was not meant to be. The owner is clearly not ready to let their house go. Look on the bright side......there are many more to choose from, keep looking. I wish you good luck. Hope this helps. You can contact me anytime if you have any questions-happy to help.

MarkSmith90210@coldwellbanker.com
0 votes Thank Flag Link Thu Jul 8, 2010
Save your money on attorney fees. The short sale addendum gives EITHER party the right to cancel in writing PRIOR to the bank issuing an approval letter.

HOWEVER, you should have your agent investigate a bit more. How much are these sellers negative with their equity? Do they owe $800K & the property is worth $500K? Your best option at this point is having a 'meeting of the minds' of sorts,,,the owner needs to sit back & say "hey, how long is going to take me to break even on this house? Should I be taking advantage of the mortgage debt forgiveness act NOW before it expires at the end of 2012?
The owner needs to know that even though they missed payments (if that's the case), they could still purchase another home again, maybe even in the same neighborhood in 12mos.

Let me know if you have any questions, I can also look into this for you, by checking to see what their approx. loan balances are. Email me directly, I won't re-post on this same thread.

EmilyKnell1@yahoo.com
562-430-3053 cell
0 votes Thank Flag Link Thu Jul 8, 2010
Here in Southern California we use a short sale addendum that specifies the terms by which each party my cancel. I would refer you to that specific document for answers in this case. As a rule of thumb, all short sales are subject to lender approval and seller's acceptance of their terms, so a seller can generally change their mind.
Best,
Debbie Bremner
The Bremner Group at Coldwell Banker
DRE#00588885
Direct 310.571.1364
Cell 818.564.6591
Blogging at http://WWW.thebremnergroup.com/blog
0 votes Thank Flag Link Thu Jul 8, 2010
Contact an attorney!

There are a lot of variables, and you need someone to review all of the existing paperwork and contracts.

Your broker should have a contact for you.
0 votes Thank Flag Link Thu Jul 8, 2010
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