Q: I have a question about bids and short sales. My wife and I have put a bid in on a house and it is a short sale. We offered $275,000 and we have seen paperwork showing that the owners purchased it for around $350,000.
The sellers have 90 days under the papers we signed to respond to our offer. We have not had any inspections or a survey/appraisal completed yet. The more we think about it, we are worried we jumped the gun on this offer.
We might want to get out of the deal before they officially accept our offer. They have $3,000 of our cash in escrow. We would like to know if we can pull out without losing our $3,000.
A: If, as you have indicated, the sellers have not yet accepted your bid to purchase their property, you should be able to withdraw your offer. But as with so many things, the devil is in the details.
Some contract forms bind the buyer to the offer for some time. During that period of time, the buyer can’t cancel, rescind or withdraw the offer. But if your contract doesn’t have that language, you will need to send a written notice to your seller, the listing agent and the closing agent, if there is one handling your transaction, that you withdraw, cancel and rescind your offer to purchase the home.
To protect your $3,000 you might want to have a real estate attorney review your contract and send the notice to the seller.
If your seller has accepted your offer to purchase their home, you can’t rescind your offer but in some parts of the country you still might have the ability to terminate the contract. If your contract has a contingency provision allowing you to get legal advice on the purchase, that contingency may also allow you to terminate the contract as a result of having discussed the issues of the purchase with your attorney.
Finally, if your contract has an inspection contingency clause, you might be entitled to terminate the contract if you find things wrong with the home and the seller refuses to fix those items to your satisfaction.
In each of these instances, you would be wise to use a real estate attorney to help you navigate the legal issues involved and make sure you can get your deposit back.
Published: Jul 21, 2008