By Christopher A. Combs
Find answers to the questions and more Hotline questions and answers addressing the following topics by clicking on the category in italics above each question. Visit AARonline for more hotline topics.
Short Sales
SELLER MUST AGREE TO LENDER’S REQUIREMENTS FOR APPROVAL OF A SHORT SALE
Q: The seller and the buyer executed a Contract with the Short Sale Addendum. The seller submitted this Contract to the lender for approval. The lender has furnished a notice of approval of the Contract, provided that the seller pay the short sale difference in monthly payments over five years. The seller now wants to cancel the Contract with the buyer. If the seller wants to cancel the Contract with the buyer because the lender’s approval requires monthly payments over five years, can the seller cancel the Contract?
Short Sales
AFTER CONTRACT WITH SHORT SALE ADDENDUM IS EXECUTED SELLER CAN ONLY ACCEPT BACK-UP OFFERS
Q: The seller and the buyer executed a Contract with the Short Sale Addendum. The lender says that it may take four weeks to determine if the lender will accept this Contract. Three days after the seller and buyer execute the Contract with the Short Sale Addendum, the seller receives an all-cash offer to close in fifteen days. Can the seller cancel the Contract with the Short Sale Addendum in order to accept the all-cash offer?
Short Sales
BUYER’S BROKER MAY NOT CONTACT SELLER’S LENDER
Q: The seller and buyer #1 execute a Contract with the Short Sale Addendum. This Contract is submitted to the lender for approval. The seller rejects an offer from Buyer #2. Can the broker for buyer #2 contact the seller’s lender directly to present buyer #2’s offer?
Short Sales
SELLER MUST SUBMIT ACCEPTED SUBSEQUENT OFFER TO LENDER
Q: The seller and buyer #1 execute a Contract with a Short Sale Addendum, and submit this Contract to the lender for approval. Two weeks later the seller and buyer #2 execute a “back up” Contract with a Short Sale Addendum for a $10,000 higher purchase price. The seller then realizes that, if the Contract with buyer #2 is sent to the lender for approval, there may be additional delay. The seller now does not want to submit the Contract from buyer #2 to the lender. Does the seller have to submit the Contract from buyer #2 to the lender?
Short Sales
SELLER CAN SUBMIT “SHORT SALE” BACKUP OFFER TO LENDER
Q: The seller and buyer execute a Contract with the Short Sale Addendum, and this Contract is sent to the lender. The seller has now accepted a back up Contract with the Short Sale Addendum at a higher price, and is planning on submitting this backup Contract to the lender. The buyer on the original Contract is objecting to the submission of this backup Contract to the lender. Can the seller accept a back up Contract and send this backup Contract to the lender?
Short Sales
BUYER’S BROKER DOES NOT HAVE TO REDUCE COMMISSION IN SHORT SALE
Q: In the MLS the listing broker offers a three per cent co-broker commission. The listing broker is the owner of the home and is not taking any commission. The lender has now approved a short sale, but demands that the co-broker’s commission be reduced to two percent. If the co-broker commission is not reduced to two percent, the lender says that they will not approve the short sale. Does the co-broker have an obligation to reduce the commission from three percent to two percent in order for the short sale to close?
Short Sales
SELLER IN SHORT SALE DOES NOT HAVE TO SUBMIT SUBSEQUENT OFFERS TO THE LENDER
Q: The seller and buyer #1 execute a Contract with the Short Sale Addendum. The Contract is submitted to the lender. Three weeks later while waiting for the lender to approve the sale to buyer #1, the seller receives an offer with the Short Sale Addendum from buyer #2. This offer from buyer #2 is $10,000 higher than the offer from buyer #1. The seller refuses to accept this higher offer because of concern about more time delay. Does the seller have an obligation to submit the higher offer from buyer #2 to the lender?
Short Sales
SELLER REQUIRED TO WAIT REASONABLE TIME FOR LENDER APPROVAL FOR SHORT SALE
Q: The seller and the buyer execute a Contract with the Short Sale Addendum. The Contract is submitted to the lender. After two weeks the lender has still not responded regarding approval of the short sale, and the seller has now received a much better offer from another buyer which will not even be a short sale and the seller will receive $5,000 proceeds at closing. This buyer will not accept a “backup”position. How long does the seller have to wait for the lender to approve the short sale to the original buyer?
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