You ready? Here it is: “Buyer may void contract at anytime prior to 3rd Party acceptance. All parties agree to sign release to that effect with the earnest money being returned to the buyer.”
There, that wasn’t that hard at all. Seems pretty simple doesn’t it. Makes sense too! That right there solves the problem we have all heard so much about short sales.
By adding that clause to any short sale contract, it keeps the buyer in a position where they can keep looking for a house while they wait and wait and wait for an employee of the lender to deal with their offer. I’ve heard of people who waited like 4 months before they even get a counter offer from the lender. Some people (including myself) have had the short sale process take so long that the house ends up getting foreclosed before the lender works out the short sale.
The bottom line is that short sales are a miserable experience for the buyer. Often, they don’t work out at all and the poor buyer has missed out needlessly on other houses they may have wanted.
I hope I have just started something that will become standard practice to realtors across the country. It’s the right thing to do for buyer-clients. Listing agents might not like it much, but since the seller is already in pre-foreclosure and isn’t going to walk away from the sale with a penny, they will agree to it. The listing agent knows that if they don’t get a contract from somebody, the house will be foreclosed and there won’t be any commission check, so play tough or be on the lender’s schedule.