When Your Sacramento Short Sale Contract Expires

My transaction coordinator flags me when a short sale contract is about to expire. But it’s not really my place to ask the buyer’s agent to extend. As a Sacramento short sale agent who represents the seller, however, I do want to protect the seller’s interests. Generally, I will call the seller to ask if the seller wants to extend the contract with the buyer, and often the seller has no reason not to extend the purchase contract. But sometimes, for other reasons, a seller might want to cancel the contract and choose a different buyer.

What I find interesting is that buyers rarely realize their contracts are about to expire, and buyer’s agents are often in the dark as well. If an agent doesn’t sell very many short sales, an agent might not know that the short sale addendum sets the contract period. In Section 1A, the short sale addendum establishes the time frame during which a buyer and seller agree to wait for lender approval of the short sale.

It’s funny because upon contract inception, agents often miss inserting a time frame. The default, if no other number of days is entered, is 45 days. That’s laughable because very few short sales are approved in 45 days. I wonder how many short sales completed between other parties have expired by the time they close escrow? I imagine a lot. Because so many professionals tend to overlook the power of Section 1A.

Up front, buyers often balk at inserting 90 days, which is almost always my recommendation. But when those 90 days are over and the seller is about to cancel the contract, all of a sudden the buyer is willing to extend for as long as it takes.

Why don’t they just do that upfront? They wouldn’t have this problem if they put, say, 360 days, in Section 1A. It’s unlikely their contract would expire by the time they receive approval.