Wondering how to cancel a listing or purchase contract? Below is a previous post on another site written by partner Elizabeth Weintraub. What is so interesting — it’s as relevant today as when written, more than a decade ago. These questions are asked often by the public when visiting our website about: Sacramento Real Estate.
“It’s too bad that you can’t just rip up a contract to terminate an association or an agreement, but that’s not how it works. To find out if your contract can be canceled, the first step to take is to read the contract. Contracts typically contain a provision for cancellation.
Immediately, the agent apologized for her former client’s behavior. As though what had happened carried a stigma of some sort. I didn’t even recall the transaction. I searched for her name on my computer and found a sale in which she had submitted an offer, but I could not recall any details. It was a few years ago, and hundreds of real estate closings later. Whatever happened was water under the bridge.
I don’t believe it’s the other agent’s fault when a client cancels. Maybe that’s because I have sold hundreds of homes in Sacramento and, as a result, I realize that stuff happens — stuff that we can’t always control. Once, I had a seller start to cry when I brought him an offer. It was full price, everything he wanted. But that’s when the reality hit. He was too emotionally attached to his home and had relied on other reasons, things he had used as an excuse to sell, and he had talked himself into putting his home on the market. However, when it came right down to it, he didn’t really want to sell.
Was I going to beat him over the head and say: See ya in court, buddy? To a man who is in love with his house and made a mistake? That’s incredibly stupid on so many levels. I released him from the listing.
Agents we remember who “did us wrong” are agents who are unprofessional. Those who don’t return phone calls or, worse, scream into the phone, or refuse to submit required documentation, intentionally thwart transactions. Not agents whose sellers or buyers cancel an escrow. Sacramento real estate agents tend to hold other agents accountable for honesty, ethics, and doing the best job that they can. Not for how their clients react.
Agents this Sacramento agent remembers are those with whom I close escrow, not the others. Some agents who work with me end up in multiple transactions with me. They know I will be professional. That’s a good thing.
This buyer was concerned because HSBC had twice increased the sales price. Is this normal, you might wonder? Yes, it is. There are many reasons for a price increase during short sale negotiations. There could be several BPOs. The servicer might establish a market value that is different from the price point determined by the investor. Not to mention, prices are inching upwards in Sacramento. I closed a Roseville short sale last week that had 3 price increases during processing, and the last adjustment exceeded 10%. A short sale condo in Rancho Cordova was bumped more than 20% when a buyer balked and walked and a new buyer stepped in.
Her suspicions were aroused because the price increases were not presented to her in a formal manner — via a worksheet or letter from the bank. Instead, the listing agent had called the buyer’s agent to provide the verbal communication. The buyer felt this procedure was unprofessional. Yet, that is the procedure for most short sales. I don’t blame a buyer for being wary. I wouldn’t like it if I was simply informed that I needed to pay $10,000 more without proof from the bank nor an appraisal to justify, but that’s how short sales work.
The thing is if a buyer doesn’t want to pay it, another buyer will pay it. That’s what the bank is banking on. And the bank doesn’t care. You might think the bank cares that the home needs paint, new carpeting, the roof leaks, but I’m telling ya, the bank doesn’t give a crap.
In this particular instance, the buyer disclosed she was FHA and applying for the CHDAP program. Holy toledo, the only thing more problematic than that would be a VA buyer and, even then, it would be a tight race. In fact, a VA buyer might have an edge over a CHDAP. The basic way to close a CHDAP in a short sale is to get a short sale extension. A short sale extension is not always possible.
My advice to this buyer — after telling her I can’t give her advice because she’s in contract and under agency with another agent? My solicited advice was to stay in escrow. For heaven’s sakes, don’t cancel. She does not realize how lucky she is to be in escrow and be buying a home in Sacramento. For every buyer who wants to buy an entry-level home in Sacramento, there are 9 more who won’t be able to buy. They will get beat time and time again by cash investors or conventional buyers. Buyers would give up their eye teeth to trade places.
Welcome to our Sacramento housing market in the spring of 2013. If you’re in escrow, stay put and don’t whine.