I wanted to clarify a recurring issue regarding short sales and deposit monies. Some agents, despite having an agreement signed by both buyer and seller, have been holding deposit checks (without putting them into escrow), pending approval of the short sale by the lender.
Please note that once an agreement of sale has been executed by both buyer and seller, the deposit check MUST be placed in escrow. The contingency on short sale approval by the lender is no different than any other contingency such as a mortgage or inspection contingency.
As I am sure you are aware, if a buyer stops payment on their deposit while it is sitting in an agents file, the agent and CBH could be liable for the funds if an escrow dispute were to arise.
Please advise your agents accordingly.
Barry W. DeGroot, Esq.
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2 comments:
Thanks for the update!! The short sale market can be very confusing.
Confusing isn't even the half of it! It's enough to drive you insane!
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