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I know you said there were no extra clauses in the contract, but was there a clause in the contract that said that the bank had to respond within a certain amount of time?

My understanding of this is that you can withdraw your offer on a short sale whenever you want up until it is accepted by the seller and the bank (if you have stated that in the offer).

No. The only addendums in addition to the CAR contract was "Short Sale - Subject to lenders approval", and "as-is" sale.

No time frame. I haven't given them any deposit yet. Only a copy of the deposit check.

The offer I made was a low-ball offer a while back, but it doesn't seem like it's a low offer anymore...

I'm no expert, but we've made several short sale offers. My understanding is that you can back out anytime before they send an approval letter. Just making an offer doesn't put you into contract. And once you are under contract, you have some period time (17 days?) to back out even then and still receive your deposit back. They won't (or shouldn't) cash your deposit check until they send the approval letter and you sign it, that's what puts you into contract.

Someone correct me if I'm wrong.

They don't have the actual check - just a copy. But I signed the contract and the seller (borrower) has accepted my offer. We are just waiting for the bank. I was under the assumption that I am in contract with the seller. I guess it can be interpretted as in the contract won't take effect until the lender approves the contract as well.

Vain says

They don’t have the actual check - just a copy. But I signed the contract and the seller (borrower) has accepted my offer. We are just waiting for the bank. I was under the assumption that I am in contract with the seller. I guess it can be interpretted as in the contract won’t take effect until the lender approves the contract as well.

I understand. We have been in the same situation on two houses. The first for almost 6 months now with no approval letter. The other for a about 2 months with no approval letter. Without the approval letter, nothing moves forward. We made other offers on other short sales because it's ridiculous to sit around and wait 6 months for the bank to get off their asses, only to find out they won't approve.

The point being, you are not really under contract until you sign the actual approval letter from the bank on the short sale. At least that's my understanding of how short sales work.

You made an offer with no date/time expiration? I know short sales take a long time, but you should still put a date - 1 month, 2 months, something.

It depends on your state. Some states have a default time period. I don't know what CA's rule is. It could also be what is considered a "reasonable" time period. Are you sure your CAR contract doesn't have a date? Usually it defaults to 3 days.

If you want to make sure the offer is dead, what you should do is send a rescission of the offer. Otherwise, if the bank does accept, you could be stuck.

No end-date on the offer? I'm assuming that you offered thru a realtor and it's on their massively wordy earnest money agreements. I'd read the fine print. I'd also ask an attorney.

elliemae says

No end-date on the offer? I’m assuming that you offered thru a realtor and it’s on their massively wordy earnest money agreements. I’d read the fine print. I’d also ask an attorney.

It was actually my decision for the high earnest money deposit. It shows the bank that the buyer is serious. I also put no inspection contingency as well. The agent I used is also the seller agent, which is why I didn't have to fight with imaginery multiple offers. Though I can't say she is after my best interest, or the sellers. It's quite clear she's after HER best interest. Which is fine with me.

The question is length of time that the offer is in force. It's either on the contract you submitted, buried deep in the fine print, or it's a state law of some type. I find it hard to believe that one can submit an offer subject to lender's approval and be stuck forever...

Vain says

It was actually my decision for the high earnest money deposit. It shows the bank that the buyer is serious. I also put no inspection contingency as well. The agent I used is also the seller agent, which is why I didn’t have to fight with imaginery multiple offers. Though I can’t say she is after my best interest, or the sellers. It’s quite clear she’s after HER best interest. Which is fine with me.

Personally, I would never waive the inspection contingency on any home, even a new one. I want to know what is wrong with a place up front.

a4adam says

Vain says

It was actually my decision for the high earnest money deposit. It shows the bank that the buyer is serious. I also put no inspection contingency as well. The agent I used is also the seller agent, which is why I didn’t have to fight with imaginery multiple offers. Though I can’t say she is after my best interest, or the sellers. It’s quite clear she’s after HER best interest. Which is fine with me.

Personally, I would never waive the inspection contingency on any home, even a new one. I want to know what is wrong with a place up front.

Oh I guess I did not mention this with that statement. My father is a contractor and we feel he's more than qualified to inspect the home on the initial viewing. If I had to hire someone for an inspection, he'd be the guy. I look for the appeal of the home, while he looks for damages/coverups/bad design and things that cannot be fixed with reasonable effort.