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12-01-2012 10:22 AM
I live in California and we made an offer on a Short Sale property in July 2012. The first bank Chase has accepted our offer. However, The 2nd bank US Bank has not. The 2nd bank has accepted their monetary settlement but say if the Seller receives their 30K incentive from chase they will not accept the offer. Does anyone know anything about this 30K incentive Chase is offering? The home also has a Lis Pendens.
Because the 1st bank has accepted our offer Escrow has been opened and we put down a EMD. The sellers agent just informed us that it could take up to a year to work out, when they we telling us a month ago that we were going to close by the end of the year. (very frusterating) The sellers agent has said very little about the Lis Pendens and never gives us a direct response. Since we made our offer property values in the area have increase 40K-100K. Do you think this deal will go through? What rights as the buyer do we have? Is this a stall tactic to keep the sellers in their home longer? Are the sellers agents being difficult to get us to cancel escrow so they could get more money for the property and keep the sellers in their property longer? Any advice would be greatly appreciated?
12-01-2012 03:05 PM
Are you sure it is a 30K incentive? It is called “cash for keys” and is an incentive to get the seller to move out of the house peacefully. Most incentives are in the $3,000 range, but maybe Chase will give the seller 30K to leave. I have heard of cash for keys in the $10,000 range and I have heard that they can go up to 30K, but I have never have seen it. Chase giving the seller that amount of money to leave would probably upset the 2nd holder as, arguably, that could have been their money. 2nd holders hate to see the seller rewarded for being a deadbeat and of course the 2nd holder really ends up taking the big loss.
With increasing prices it is foreseeable that a stall tactic, where you would drop out and the seller would cancel your offer, may make better sense to the seller. If you could prove (very difficult) the seller is stalling on purpose you may be able to obtain some type of monetary damages. I assume that you initialed the arbitration clause in your purchase agreement. If so, the damages you could select are extremely limited. I really doubt you could prove this in a court of law and I see no way to get “specific performance” which means they have to sell the house to you. However, you have not provided many facts for me to evaluate.
Remember, in law truth is only what you can prove. With all that is going on with this property delays are reasonable, wanted or not.
Additionally, a release must be obtained on the Lis Pendens before title can transfer to you. This may or may not be a big deal.
My advice would be to cancel your escrow and move on. I realize that this is not something you would like to hear.
Of course, all this is just my opinion.
P.S. Where was your agent in all of this? Get your agent involved. He/She should be looking out for you!
12-01-2012 11:04 PM
A few banks, Chase being the most agressive, offer up to $35k to the seller/borrower, as a short sale incentive.
Since the objective of a short sale - from a lender's viewpoint - is for the seller to walk away with nothing, a second holder has every right to object to such a "reward", in view of the loss the second is being asked to forgive.
Bob Phillips - Realty ONE Group - South Orange County, CA