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Can I back out of a short sale.

I put in a offer on a short sale property and I am starting to think the house is not for me. The seller has accepted the offer but still waiting for the bank. The property is a townhouse and has been on the market for 150+ days. I am thinking that it would not be a great investment. its a 2bed 1.5 bath 1 car garage and is a 2 story. Now this week there are 2 new listings for 2bed 2bath and 2 car garage single family homes. they are listed at the same price. what advice does everyone have.
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May 25 - Albuquerque
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Answers (11)

Only the person wishing to back out can answer that for themselves, weigh the cost benefit of losing the earnest money over the back out and then trust one's gut. 
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September 05
Other's have noted this but I want to emphasize.  There should be a short sale addendum.  In it it gives the seller a period to get approval from the lender to get bank approval. That timeline is normally shorter. I normally tell my buyers to do every 30 days that way you have the opportunity change your mind every month.

 The offer you submitted should have a contingency that says "subject to short sale approval." That means the seller really can't sell you the house without the bank approving the sale.  That is why the short sale addendum is so important. It makes things like this easier.

 
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September 05
Hello1I have had clients in this exact position. In my experience, as long as the buyer and seller have not signed ALL documentation and do not have a binding agreement, I feel you can back out. Check with your realtor and legal counsel for more information.
I hope this helps put you on the right path to your answer.
Thank you for your question,
Marianne Drenik
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September 05
As long as the lender has not approved the short sale or the offer, you should be able to back out and receive your full refund. Time is of the essence however. Read your contingencies and act fast.
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September 04
Be sure to read the "short sale addendum" as there are many "outs" to a contract involving a short sale. Typically a short sale "due diligence" period does not begin until all applicable lender/lienholders have approved the short payoff terms of the deal. Even after approval, you have conditions that will allow a buyer to back out of the sale. Be sure to hire a real estate broker or real estate attorney! Short sales can be complicated! If you think it's expensive hiring a real estate expert, just wait and see how expensive it can be to hire an amateur. Short sales are not for everyone; but can be tremendous deals if you have an experienced broker/attorney and have the stamina to survive the complications that may arise!

Jack
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September 04
I would certainly read the contract with your agent.  If a Short Sale Contingency Addendum was used, then there would be language discussing dates and timelines for a Bank Approval of the Short Sale. If this has expired you may be able to terminate your contract.  The sound advice of your Real Estate Agent should help point you in the right direction.
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September 04
In Arizona, the contract language states that the buyer may cancel their offer unilaterally prior to receiving an approval notice by the bank. Once the approval notice has been received, buyer and seller are officially under contract. Some contracts may ask for non-refundable earnest money for a time period in hopes of keeping a buyer's interest as the short sale is negotiated.  Keep in mind, the buyer may back out at any time. What is not for certain is that the earnest money will be returned or kept by the seller.
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May 25

As far as the price, Short Sales are best successful when offered at the true price (Value).

Short sales are not bargains, They are short because their market value has dropped since the loan was taken out.

Beyond that read your contract., Especially look at the closing date or at the short-sale addendum for the date by which the lender has to agree





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May 25
Read your contract.
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May 25
I'm sure there are contingencies to the short sale contract that would allow you to cancel. You just need to review and seek legal counsel if necessary. Contracts are legally binding obligations.
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May 25
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Talk to your agent and look at the contract terms for termination of the contract. If you do not have an agent or even if you do it would not hurt to consult a real estate attorney.
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May 25
 
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