Legal Question in Real Estate Law in California

short sale home

My husband and I are in escrow to purchase a short sale. It is set to close on September 12th. The bank has notified the seller's agent that it now wants $232K. Both the seller, ourselves, and the agents have signed a purchase agreement for $219K. Can the bank change the amount even though we have a signed agreement and are in escrow?


Asked on 8/21/08, 10:24 pm

2 Answers from Attorneys
Larry Rothman Larry Rothman & Associates

Re: short sale home

What evidence do you have that the Bank agreed to the Short Sale amount prior to your signed agreement? You may or may not have a case depending on the written documents you have.

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Answered on 8/22/08, 12:07 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: short sale home

Whoops! I'm not an expert (is anyone?) on the modern art of structuring "short sales," but it looks to me as though someone (seller or seller's agent) forgot to lock in the agreement with a key player, the lender.

A major aspect of a short sale is the agreement of a party with a lien on the property to remove their lien in exchange for fewer bucks that they are entitled to get under the loan; they do this because they know they aren't going to get paid in full anyway. However, the lender is still in a position to play hardball. If they haven't committed to take $219K, as it appears, there is nothing to stop them from upping the ante. Without the lender being committed to $219K, they can play games with you.

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Answered on 8/21/08, 10:48 pm


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