Have you ever heard of this?

[Kristine Eickman]

We are looking at putting in an offer on a short sale that is going to auction in 2 weeks. The agent is requiring us to sign a clause that says no matter what, we are not allowed to back out. This is the exact wording:

1. You may not simply “walk away” from a contract which is subject to lender or
third party approval - you will become obligated to perform under the contract from the date of
its execution until the lender or third party disapproves the contract or a term in the contract
permits either the seller or buyer to terminate.

2. The lender or third party is under no obligation to consider, respond to, approve,
or disapprove your contract within any specified period of time.

3. It is possible the lender may elect not to approve the contract, in which event you
will not be able to buy the property at the listing or contract price.

4. At the time the seller enters into the contract with you, the seller may not have
been informed by the lender:

(a) what an acceptable purchase price may be, or

(b) that the lender would participate in or consider a potential Short Sale offer.

Receipt of the above disclosure is hereby acknowledged.

Would you ever sign this? I cannot believe that it is legal to make someone sign this. I know that it goes to auction in 1 1/2 weeks so clearly if that happens, we are out. But if they decide they might like our offer, they can halt the forclosure and then we are locked in until THEY decide if they want to take it or not.

Does this sound right to anyone?

[Wayne Brooks]

Yes, this is actually a very good disclosure. Everthing in this is true in every short sale situation, it's just that not many people tell you so clearly. But what you may be missing is, in paragraph 1, it's telling you there is a "drop dead" date for the seller to get approval, or there should be, in your purchase contract. If there is no approval by that date you can cancel without penalty, or it may automatically terminate. I would take out the automatic termination, so it gives you the option. Everything else in this disclosure is just factual, of all short sales. I like that disclosure so much I may steal it!