Withrawing Offer on a Short Sale due to No Seller Response ?

I submitted a cash offer on a short sale Weds. My agent is also the listing agent, feels my offer is solid and claims he's been in touch with negotiators, making the case to take this deal. A previous bank-approved deal fell through due to buyer financing. My offer is about 9% less.





Being new to short sales (in this case there is already a foreclosure judgement on record) I assumed my offer would go directly to lender for approval and thus didn't put a timeframe for seller response in the offer. The realtor felt the offer was good and the bank would respond rather quickly. The next day he clarified it still goes to seller first, %26amp; he anticpated a seller response within 48 hrs. On friday afternoon I asked him to get it to us in that window, because we want to qualify for the fed tax credit and time is running short. He assured me only the seller-signed contract is required for the tax credit, not the bank-approval. It's now day 4 and I've heard nothing from the realtor. My intention is to follow up tomorrow (Monday) and stipulate that the seller must respond by 5pm or the offer will be withdrawn.


5 days is beyond reasonable for seller response, and there are other properties we could purchase if the seller isn't interested.





Q #1. Is there any reason I should not be able to withdraw the offer and collect my escrow deposit?





Q# 2. Is the agent correct in his assessment that a seller-signed contract is all that's needed to meet the April 30th tax credit deadline, or does a short sale / foreclosure require lender acceptance as well?





Please, only qualified responses. Thanks for your help!|||Q1: You can withdraw an offer anytime prior to the other party's acceptance.





Q2: The Internal Revenue Code does not define the term "binding contract." Whether your seller-signed short sale contract qualifies as a "binding contract" for purposes of the Code is a question for a tax professional, and even then is something that the IRS may argue about. It's probably more likely to qualify as a binding contact if the bank acceptance is stated as a contingency, rather than a necessary requirement for acceptance of the offer. Most of the boilerplate forms that real estate agents use for short-sale offers contain clauses that essentially state that there is no acceptance (and no binding contract) until both the home owner AND the lienholder accept the terms. This type of clause is really intended to protect the buyer; without such a term, a buyer could be stuck in a contract indefinitely while the lender is contemplating its options.





But, notwithstanding the above, your real worry should be the July 1, 2010 requirement for closing. Short sales take forever to close, and it's wishful thinking on your part if you seriously believe you can close a short-sale in 60 days.





And a second issue: What do you mean that there is a foreclosure judgment on record? If the mortgage has already been foreclosed, then that means the lender owns the home. You'll need to review the chain of title to double-check who owns the property. It's very conceivable that the home has already been foreclosed, and the occupant has simply not yet bothered to move out.|||It appears that your agent is inexperienced with short sales, because it probably took 48 hours just to get to the right department. Short sales responses typically take about two weeks for the bank to respond because they go through a department, rather than just one person making a decision on it.





If you are not in a hurry, I would send over an addendem giving them 5 more business days to respond. If they do not respond in 5 business days (and meanwhile, your agent needs to CALL them), then I would formally withdraw the offer.





Your agent is incorrect that all that is needed is a seller-signed contract to mee the April 30th tax credit deadline because it's a shortsale, you legally do not have a valid contract AT ALL without bank approval.





Question: If this property is in forclosure, then your agent has submitted the offer to the WRONG individual. The bank doesn't get the offer if it's in foreclosure, the trustee on record does...and that can explain why you haven't got a response yet.|||See IRS Form 5405. There are 2 deadlines that apply to qualify for the tax credit, you would need a valid contract by April 30 (including approval from any lenders, due to the foreclosure) AND you would have to close by the end of June (before July 1). You cannot "apply" for the tax credit until after you close.





The agent is just trying to string you along and not lose a sale. But try to prove any misunderstanding that is not in writing.





I don't see how a contract could be "binding" if it is from someone who is not authorized to fulfill that contract on their own.|||The odds of this happening in time for the tax credit are almost 0. Short sales take months. Not weeks or days. Your agent is completely wrong in stating that the seller's approval is the only one needed by 4/30 to qualify. If you love the house, fine, proceed. My personal opinion is that it is not wise to use the same agent as the seller in any case, especially one who does not seem to know enough about short sales, and do not count on getting the credit.