Profile picture for user04252714

Short Sale-- How do I get out of contract if I find a better home

I am thinking of pursuing a shortsale and I want to know what type of a clause to put in on my offer that would make it possible for me to cancel the contract if I am unhappy with the amount of time it takes to get bank approval. The reason for this is if I find something better while I wait..i'd like to cancel the short sale contract and move on a property that could close a lot faster.

any help  on a clause would be helpful!
  • August 02 2013 - Boston
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Answers (7)

Profile picture for RafaelAPRG
You can have your buyers agent ad a time frame clause where you would be giving bank a time frame to process the short sale. A good buyer's agent should be able to create a good offer with right conditions to help protect you.
  • October 27 2013
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Are you using a Realtor? when writing an offer they should be able to help you with the Verbiage to protect your best interest!!
Buyer agency doesn't cost the buyer anything
  • September 05 2013
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Profile picture for edboner
I would add a time limit for lender's short sale approval.  There are other, less straightforward ways to do the same thing.  You could add a set date, but state the buyer will have the option of extending the time for approval....x number of days or x number of times....essentially giving you an option to add time. 
  • August 04 2013
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Then buy a house that is not a short sale. it WILL take a long time. You can count on it.

  • August 04 2013
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Profile picture for Outer Banks N C
Usually there is a short sale addendum that must be added to an offer and it explains the contingency of the short sale. What most will say is something like the contract is contingent upon getting the banks approval. Until they approve the contract still has a contingency and so you would just need to terminate the contract on the basis the contingency has never been removed. It is usually just that simple. Your Realtor will be able to explain it.

tim
  • August 02 2013
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Profile picture for Pacita Dimacali
If you're shopping around, and don't want to wait, perhaps you should bypass short sales altogether. Perhaps this will help

Thinking of buying a short sale? What the buyer needs to know


But if you are serious...

Before you write an offer, please understand what writing an offer on good faith means. Good faith is defined as: Effort made, information given, or transaction done, honestly and without a deliberate intention to defraud the other party. However, good-faith does not necessarily mean "without negligence:. Also called bona fides, it is implied by law into commercial contracts.

Most state associations of REALTORS will have their own short sale addendum wherein a specific time frame states how long a buyer will wait for short sale approval. If the approval isn't received until then, the buyer can cancel.

In California, for example, the stated time frame is 45 days from the time the seller accepts the offer. In our seller's market, the strongest offer is from those who specify longer periods of time to wait.

Please note that short sales take time to approve -- and there is a lot of effort and reams of documentation that are submitted to the bank. So I hope you can appreciate what sellers and their agents go through. If, during the short sale process, the buyer backs out, we start the process all over again.

If the buyer isn't willing to wait, the seller isn't inclined to accept the offer.

Good luck to you
  • August 02 2013
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 I do not know the laws in your state but you could add a clause to that effect, unfortunately it's not likely to be approved by the seller's lender.  My advice is keep looking at other houses and if the short sale ends up in foreclosure and gets taken back it will be re-listed as bank owned with none of the short sale pains.  If you have not found something you like better by that time you can make a straightforward offer with normal response time frames.  I hope that helps.  Good luck!
  • August 02 2013
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