Profile picture for user6239335

What shall I do if bank wants to cancel the contract after I have waited for closing for half a year

We signed a contract with Bank of America to buy a foreclosure house in FL through buyer and seller realtors in May this year. For some reason due to unclear title from bank it can't be closed until now. The contract got addendums several times. Two weeks ago when addendum expired we got notice that it was going to the last step to get the clear title in order to close the house and wanted us to sign one more last extension. We were very excited about the news. Last Thursday suddenly we were informed by our realtor that the bank requires canceling the contract and because the bank can't estimate the CT (clear title) date. The cancellation form was prepared by our realtor and we were required to sign first. We don't quite understand why suddenly the bank gave a totally different decision not doing addendum any more even though we agree to wait until CT date. We already paid inspection and evaluation of the house and patiently wait for half a year and suddenly it comes nothing. That is a huge loss for us. It seems to us that such huge bank we trust does not take it seriously. We also don't understand why the bank lists the house for sale at beginning if they don't get clean title. Now it is so easy for the bank to cancel it and never think about the loss we suffered for half a year both mentally and financially?

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 07 2012 - West Melbourne
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (6)

Unfortunately the banks have all the control, and have had such control for a long time. This happens more and more often.  I personally don't think that the banks should advertise the home for sale until they have the CT.  In this case they thought that they were going to get the CT immediately/smoothly, but it appears that the owner (not the bank) filed a bankruptcy (protection). This complete stops everything, including the judge signing off on the full foreclosure and issuance of the CT.  That was unforeseen.  It also means that nobody has any idea how long it will be locked up.

Real estate investing is very involved and takes a thick skin in today's type of market.  It is not for the faint of heart.  Closings rarely go smoothly, and are very complicated.  The contract is already expired.  So the best advice is to drop it and move on to the next property.  That's about all you can do. Suing the bank is not a good idea, a time and money waster.  Believe me, the bank does not want the property on their books; they want to sell it. But nobody knew the owner would try and stop the foreclosure at the last moment with bankruptcy protection.  They also want to give you your deposit back, so don't delay on that or it could get locked up.  The bank will never give you fees or expenses, they never will do that.

You have to be ready to accept that most short sales and foreclosures will not be the simplest to close, it's just the nature of the beast for trying to get such a great deal.  If you decide you want to continue to be a real estate investor, be ready for more of the same.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 12 2012
Profile picture for user972468
He processes the cancelation form for me to sing first before seller signs to get my deposit back. In this case does it mean I require cancelling first?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 08 2012
Profile picture for user972468
Thank you very much for all of your advices.
Currently my realtor doesn't plan to process my request for expenses and fees associated with inspection... and asked me to sign the cancelation form first instead of seller. What shall I do?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 08 2012
Before signing, you may want to find try to find out what the title issue is.  If there needs to be a quiet title action taken by the seller to clear a cloud on the title, this can take an undetermined amount of time as the courts need to be involved.  I'm going through this now with a house I'm selling.  We had to cancel the contract on the buyer, since we could not give any clear timeline and the buyer was getting upset.

We all agreed to cancel with no recourse by either party.  In your case, since it's a bank selling, you may want to request expenses and fees associated with your inspection, appraisal, survey etc...  Since the seller is the one requesting cancellation.

Sorry about your issue.  it's becoming more and more common.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 08 2012
I'm surprised that they hadn't cancelled your purchase agreement months ago when it became apparent they didn't hold clear title to the property. The bank can't sell what they do not own. In previous cases, the bank (not necessarily B of A) is forced to cancel the contract and (in some cases) re-foreclose to gain clear title to the property.

Talk to an attorney in your area. Make sure you bring all of your documents pertaining to the purchase with you. Chances are there is language buried somewhere in the 40 plus pages (yes, I've seen 40 page contracts) where the bank is off the hook for their incompetence.

If they had done a title search at the time of seizing the property, they would've known they didn't hold clear title. But I've also seen a bank (not B of A - think big red stagecoach) where the title examiner discovered a cloud on title even before they listed the property. But no one from the bank bothered to read the title commitment. Fortunately, we were able to close on time, despite errors made through no fault of the buyer.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 07 2012
Short sales are a big headache, as you can see.  If I were you, I would contact a real estate attorney and sue BofA for your expenses, then I would also contact your local senator and representative and send them a summary of what has happened to you.  I feel awfully sorry what has happened to you happens to quite a few people and nobody seems to be able to do anything.  Well, maybe you will get your $$ back for lack of performance.  My heart goes to you!!! 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 07 2012
 
Related Questions
What shall I do if bank wants to cancel the contract after I have waited for closing for half a year
Profile picture for Daniel  Biro
Latest answer by Daniel Biro
October 12 2012 | 6 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 275 Sedgewood Cir, West Melbourne, FL Home For Sale
    275 Sedgewood Cir, West Melbourne, FL 32904

     For Sale: $181,900

    • Beds: 3
    • Sqft: 1702
    • Baths: 2.0
    • Lot: 8276
  2. 7916 Timberlake Dr, Melbourne, FL Home For Sale
    7916 Timberlake Dr, Melbourne, FL 32904

     For Sale: $335,000

    • Beds: 4
    • Sqft: 3305
    • Baths: 3.0
    • Lot: 18295
  3. 137 Woodland Dr, Melbourne, FL Home For Sale
    137 Woodland Dr, Melbourne, FL 32904

     For Sale: $49,000

    • Beds: 3
    • Sqft: 1448
    • Baths: 2.0
    • Lot: 11325