Handyman · St Petersburg, FL · Member since 2008 · 32 posts · 0 votes
Hi,
I presently have a contract on a short sale. It was listed at $400k after a couple reductions. I offered $340k, which was accepted. My realtor neglected to insert a contract expire date. When my realtor asked for an extension, because things were going painfully slow, the seller refused and informed us that they had a $385k back up and if I wanted to up to $385k I could get the extension. I had about another 3 weeks on my contract left when I got the email that the bank had a foreclosure date set. 3 days after my contract is due to expire. Seller asked my if I wanted to get released from the contract. I refused thinking the foreclosure may get postponed. Can't know if the back up dropped out. Seller is now working with a new short sale lawyer who thinks he can get the foreclosure delayed. I would welcome very much on ANY advice regards where I should go with this deal.
I must be missing something.
First, if it's a short sale, why does the seller care if they get 340K or 385K, either way the seller gets nothing, so refusing the extension doesn't make sense.
Second, a contract to purchase is pretty meaningless on a short sale if you don't have short sale approval. Do you have short sale approval?
Not even sure I'll have an answer for you, depending on your answers, but wanted to clarify the situation.
The seller could care because they have multiple liens to mitigate and need the higher sales price to make it work.
Also with a higher sale price they have less of a deficiency judgement or a promissory note to deal with.
Even if just getting a 1099 they have less to show with a higher price. You can show insolvency or might qualify for no phantom gain.
The seller might not really want to sell and listed for a short sale as a delay tactic.If a commercial property they might be trying to squeeze out a few more months of cash flow before walking away.
Could be a ton of different reasons depending on circumstances.
Thanks,
My guess is that the higher the offer the better chance of the bank accepting it. also I'm not sure if she'll have a deficiency judgement. I have concluded that my offer was merely accepted just to get the short sale approval process going.
Mike
