Hi folks. JUST WALK AWAY RENEE?... Some Hernando County Florida buyers feel they can just walk away from a Short Sale transaction and get their deposit back because they are just tired of waiting. That’s because they feel the short sale contract is not binding. But it is binding!

I am not an attorney, so here is my non-legal opinion on why buyers feel this way. Simply put, they are misinformed.

A Short Sale contract is no different than a regular contract with the exception of the 3rd party approval contingency. This contingency is related to the Lender approving the “Short” and NOT approving the contract. The lender has no authority to approve the contract since they are not a party to the contract.

They do however have the authority to approve or disapprove the Seller’s request for a “Short” payoff.

There may also be contingencies in the contract. Contingencies are: Conditions which must be met if a contract is to be performed.

Here are two very important outs to protect the buyers:

1. Survey
2. Inspections

Some contingencies may need to be removed in order for the purchase to be completed:

1. Title
2. Short sale approval
3. Financing

The Short Sale approval is just one more contingency in the purchase contract. And just like any other contingency it should have a time period to be removed.

If it can’t be removed in the time allowed then the parties can either extend the time period or cancel the contract and return the escrow deposit.

If it can’t be removed at all because the Short Sale was denied then the contract becomes “null and void”. The Seller is now unable to perform. This is no different than when the Buyer’s financing is denied. He too is now unable to perform.

These are my thoughts. What are yours?