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I am buying a short sale home! Q:Can the sell drop me and take another buyer after bank approval?

Hello,

I live in Los Angeles and I am in the process of buying a short sale home. 
I have been patiently waiting for the bank to extend the sale date and also for the seller's attorney to negotiate the terms of the second and third loans on the house.

In the meantime, the seller had issues with HIS Realtor and wanted to fire him.

The bank has finally approved the extension and we all came up with an agreement on how the second and third loans will be paid off.

Because the seller had issues with his Realtor, he fired him in the middle of the deal.

All of a sudden, when my Realtor calls the attorney's office, they are not returning her calls.

My question is, is it legal for the seller and his attorney to take a new Realtor and drop me from this deal?

My family and I really want this house and the attorney's office is acting really strange.

I'd appreciate feedback from anyone who has experience in this area.

Thanks
  • February 01 2013 - Los Angeles
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Answers (7)

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Thanks, Douglas!

I will send a letter to the attorney's office and see what they say!

Thanks again
  • February 04 2013
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** returning your calls, that may not do much. Remember, they fired the realtor. Doing the transaction with you, entails paying commission to the fired realtor. Threatening to sue would only annoy them. A seller can't be forced to sell their house, even when there is a signed contract. And on a short sale, it's even harder, since there is usually language stating that the contract is not valid until all parties have agreed, and that the bank may cancel at any time. Owner, bank, and you. A letter from a bank agreeing, is not the same as the bank's representative signing the contract. Talk to your realtor, they are there to help. Any doubts, please don't hesitate in contacting me via this board or by checking my profile.
  • February 03 2013
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Hi, You may send a letter to the attorney saying how much you love the house; but if he's not returning your
  • February 03 2013
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Doug,

Thanks for the response. If that's the case, what would you advise is my best course of action since my family and I really love the house?

1. Send a letter to the attorney telling him how much we love the house

2. Threaten to sue? If we do that would we have any grounds?

Just curious-
  • February 03 2013
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Hi,

It may appear as if the seller's attorney has blacklisted you and your realtor.
Possible reason, is that if the house is sold to you, the seller will have to pay a commission to the fired realtor. The reason being is that the fired realtor brought the buyer with the contract. "Procuring cause".

It may not be want you want to hear, but as long as the seller's attorney brings in another buyer at $1 over your price, everything will be OK with the bank. It may not be fair or the right thing to do, but it happens.

Talk to your realtor, and see what they say. Your realtor may advise you to start looking at other properties, and keep this one in the back burner, just in case; but don't pin your hopes on it.

  • February 02 2013
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Scott, I appreciate the prompt response.

Quick point of clarification. I have already signed an approval lettter from the bank.

After I signed the initial approval from the bank, we could not start on the loan because the attorney was still negotiating the second and third loans. By the time the attorney was done with the negotiations, the sale date was fast approaching again, so he had to go back to the bank for an extension.

So, after the bank extended the date the seller fires his Realtor and now the attorney's office is not returning my Realtors call.

My guess is that they want to go with another buyer.
If so, is it legal?

Thanks
  • February 01 2013
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Interesting story!  Just because the seller accepts your offer...the bank will need to provide acceptance over and above this phase.  On occasion the seller agrees to a price less than what the bank will accept.  If this is your case, the bank will ask for the agent to counter you or re-market the property.

For the attorney not to contact you is not acceptable, and your real estate agent should continue to make contact with either the attorney or the listing agent.

The bank is the key player here and as a buyer (or a real estate agent) the bank will take the highest and best offer that can be found...it is actually fraud if the agent fails to supply the bank with an offer and not notify the bank of a higher offer that is equally as strong.

If you made a strong offer then it could just be a delay in awaiting the banks response...if you think its low...make sure your agent is available for a response from the other agent/bank.

Good luck!
  • February 01 2013
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