Expert: Dick Dennis - 9/1/2010

Question
Hi Dick,

I signed a purchase contract to buy a home in 3/2010.   However, sellers backed out of our contract days before closing b/c they did not have the money on their end to close.  Long story short, buying this home turned into a short sale, we proceeded with the home as a short sale.  

The short sale has been going on for five months with no negotiator assigned to this case yet.  We still qualify for the $8,000 home buyer credit since our purchase contract was signed before 4/30/10 and our contract end date is 9/30.  Supposedly, the negotiator will be assigned to our short sale case within a few days with less than a month left of our contract.  

Here's where it gets sticky.  If we don't close by 9/30 and we wanted to renegotiate the contract due to losing the $8000 home buyer credit, what would happen with the bank?  would we have to start all over with this short sale process?  will the bank reject our reduced offer?  will the bank relist the property?  From what I understand, we are the only offer on this property so far.  We really still want this house, I have taken a financial hit for hanging onto this house, but losing the $8000 home buyer credit will put me over the edge with this house.  Please advise  

Answer
Difficult to say, Mike, when I am not there. Banks are now notorious for dragging short sale transactions. They tell you two months but it most often drags on for five, six and seven months. My bet the bank will come at you asking for more down or a larger purchase price the longer your transaction drags along.

How come you're not consulting with your real estate agent? That person should be on the phone virtually daily to see what is going on. The way it is going, you're going to lose that $8,000 tax credit. I do wish you well.

Dick Dennis
dixiedee13@aol.com