REO Prop Descr Error: Bank cancel's purchase agreement - HELP!

3 Replies

Entered into Agreement to Purchase REO-owned property in January (post foreclosure), but questioned property description as provided in sale docs. Wasn't until formal property survey resulted in obvious problems with legal description that seller abruptly "cancel's" the sale stating their need to "fix the property description issues". No one from seller (not REA, or other rep) has been in contact with me since and I cannot find someone with seller to get any status/info from.

I did not cancel MY Agreement to Purchase, therefore (legally) , I still have a contract with seller.  My earnest money is still being held by title company and I have $$$ invested in buyer expenses.  I WANT the property - but I cannot find anyone who will talk to me or my lawyer!  It has been 8 months now -- What can I do!?! 

There is usually a clause in the P&S or addendum to the effect that if the seller needs time to remove any defects in title, deliver possession or make the premises conform, you agree to give them an extension and if they are unable to perform by the expiration of the extension, the seller will refund buyer's EM and the contract will be void with no recourse to either party.

Read the Bank Addendum .. I gaurantee it says they can cancel for any reason without notice.  This is usually only exercised in cases where they can not legally sell the property due to foreclosure process errors.  It's very possible that they determined they did not have legal authority to excercise a contract due to a problem with their transfer from the foreclosure having to be corrected/re-done.

I would try to sit tight and make sure the listing agent knows you still want the property.

Believe me, your contract is “canceled” if they sent you written notice. As @Phil Z. stated, Every REO contract gives them the right to cancel for any or no reason.....they don't need your agreement

If you want to spend the time researching you can usually figure out the problem, especially since you already have a clue. They likely either filed an incorrect legal description in the foreclosure or maybe even in the original mtg.