Short Sale Seller Refusal

Question...has anyone else had to deal with this? 2 days before close of escrow. Buyer is VA loan approved. All conditions met. Buyer agreed  to pay for the termite treatment and pool cleaning (including new pump) as seller unable to satisfy loan conditions. Seller now refusing to sign docs to close. Seller not willing to pay the buyer back his out of pocket costs. Trustee Sale date is reset to 4/11/11. Any advise would be greatly appreciated.   Thanks.

You need to be a member of REO Pro Network to add comments!

Join REO Pro Network

Email me when people reply –


  • Yep--- its a tough one.... If theres a small repair, or fee, lets say under 500.00, I always make my buyer sign an addenda stating he is aware this money will not come back to him and all the risk is his.......

    generally, it kills the idea..... ( although not always..... stubborn is as stubborn

    Also---, Ive had sellers ruin or attempt to ruin many closings..... it seems to be a free-for -all in shortsales, unfortuneately, I think its just part of the risk we take when we do these...... we as realtors are not protected.....for that reason, I use a processing company.... puts a barrier between me and the hassles..... less frustration.... less emotional extremes...... and they have stronger legal teams than I do as a broker in a small comnpany...I know all thats going on, I can add creative ideas..... but--- am not in the line of fire........ just a thought....( pss, am working with attornies directly on s/s's as well.... works well also!!)

    Hope this helps!  Rose

  • Unfortunately this is one of life's lessons, Never let a buyer spend money on improvements or move into a property anticipating it will close.


    The good news is its only $1000, in one case a friend of mine (commercial broker) and a seller of an assisted living facility allowed a buyer to come in and start operating the business before it closed ($1 million dollar deal). The buyer was overwhelmed by the work and decided he did not want the property and simply left.


    The seller started a law suit against the buyer for breach, then the buyer filed one against the seller for misrepresentation. The broker was forced into the suit and After 2 years and close to $350k in attorney fees the court found in favor of the buyer. $150k is what it cost the broker. It forced him out of business.


    If the seller had not allowed the buyer to move in and operate the business there would have been no recourse by the buyer if it had closed and ownership transferred.


    We all have probably had to deal with this type situation and only the people who have been burned know this can and will happen, there are a lot of ways to lose money in this business, it’s bad enough when we lose time working hard on things that never materialize.


    I hope it works out for you.

    • Thanks..and I appreciate the comments. I am an avid subscriber of not allowing $ to be spent. This was a condition the VA needed in order to fund. We waited until the very last minute!!! No other options. Unfortunatley the sellers may have known what they were doing all along. Bad life lesson.  
      • Too bad you can not put a mechanics lien on their house.
  • Did the seller's lender ask for a note or leave open a deficiency judgement? Maybe that is why they won't sign and the seller's agent is still negotiating.
    • Thanks Marcy. I am dual agent on this. The buyer and the seller (small town, & they sort of knew each other)came to me to help them through this transaction. I have successfully completed 6 short sales. The sellers have been a bit sketchy all along. English is a second language for them and they started getting advice from "friends" about C4K, loan modification (they can not qualify) etc.etc. They are "just now" worried about the 1099 they will recieve. Of course I explained all of this to them early on AND gave them the info in their language. The only thing the lender asked for was a $$ contribution which my buyer had agreed to pay for them. All was good and ready to close. I truly believe they are buying more time in the house and using all means to do so...on the advice of the "friend"....So trustee sale is next week, fine and dandy, but how can I be sure the bank (I am an agent for them) gives me the asset? Plus....we have money out there that has been spent and no way (mediation? don't think so..) to recoup. Suggestions??
      • Paula it does sound like they are listening to "advice." Maybe they are planning to declare bankruptcy? With a trustee sale on 4/11 how can they possibly think they can stay in the house longer? Do you have a handout on the benefits of short sale vs foreclosure for them?  Did they sign anything saying they agree to the terms of the short sale? I think in California the seller can not get out of the sale once they agree to to the terms. I usually just use the signature they give when they get the approval letter from the bank, but now I think I will have the seller give an affirmative contingency removal to sign.  I would call or e-mail an asset manager for the seller's bank and give them a heads up about a possible foreclosure that you have already been working on.
        • Good Idea about the contingency removal, but, if they refuse to sign escrow docs, what can you do? Yes, they got ALL the paperwork, and I explained & explained. The day it occurred I submitted a concise letter to all the bank/short sale negotiator/asset managers et al and had it put in file and on Equator. I have spoken to them also. It is a wait and see now I think. I will follow it up again today and let you know. Still wondering how to get "paid back" though....a real bummer of over $1000.
This reply was deleted.