The California Association of Realtors added a short sale addendum to the required forms in November of 2007. So far, this is one of the best forms I have seen and goes a long way in protecting a buyer's rights while buying a home in California.
For one thing, it limits the amount of time a buyer has to wait to hear back from the lender's approval - "the short sale contingency period." If the lender doesn't respond during this period, the buyer can walk out of the escrow.
Secondly, the addendum expressly states that all timeline begin after the approval from the seller's lender. This protects the buyer's security deposit from getting deposited into escrow before approval.
The short sale addendum should put a lot of buyers' worries regarding short sales at ease.
Tuesday, January 29, 2008
Short Sale Addendum Protects Buyers
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4 comments:
Real Estate System
Any clue whether these empty houses have a homeowners exemption filed with the county? If so I wonder if that would be fraud. Just asking
John,
Thanks for chiming in. If the homes really were owner-occupied, a homeowner's exemption can certainly not be considered fraud. And my guess is the residents have long since stopped paying mortgages and all other bills associated with the home, leave alone their property taxes.
I disagree with your first statement. It does not limits the amount of time a buyer has to wait to hear back from the lender's approval.
Item "A" is a disclosure from the Seller to Buyer that they are in the process of getting the Bank to approve the Short Sales.
Even if the bank approve, it may takes another month for the bank to assign a negotiator. Therefore, item "A" doesn't limits the amount of time a buyer has to wait.
Anonymous,
Duly noted. Usually, an approval is a written approval, though. I would not depend on oral approvals anyway as a buyer.
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