Short sale falling through, Stupid Buyer....

[brokegeek]

Ok, Long story short...

Filed Ch 13 Last November to keep house and remain afloat. That worked for a while until we started getting behind again due to unexpected expenses... Motion for stay was lifted and we were almost current on home until July 07 when we basically couldn't afford it any longer. We listed the home in August for a short sale.

We received an offer Sep 28th, countered to be contingent on our lender approval of short sale with closing TBD, no other contingencies. Two days later comes notice of foreclosure, next day notice of auction in late November. Things looking good, full asking price just need to let Wells Fargo get going on it.

Today I received a call from our agents saying the buyer wants to back out. He has no contingencies to allow this, and basically it sounds like he wasn't aware that it was a legally binding contract.

I don't want to sign the cancellation of the offer as I want Wells to get someone(in Loss Mitigation) assigned to this so I may have some options. I also want to make this @sshole and his incompetent agent suffer a since we already moved out thinking the place was sold. I definitely don't want to walk out of the deal without at least his earnest money. One problem, in MN, I think if the property is vacant, they can accelerate the foreclosure process to 5 weeks instead of 6 months...

Since Wells hasn't assigned anyone to the Workout Offer, we don't have a closing date set. But they will put on hold the auction date due to an offer on the property once someone is assigned the case. Since that offer is probably going to dissolve, basically, this really sucks....

I guess I am looking for a couple suggestions. I can't force someone to buy the place(sort of can though the legal system, but at what price?).

Should I re-list the place? Let it go to auction and rework my Ch 13? Convert to Ch 7? I think I might just qualify for a 7.

Also, does anyone know if a foreclosure will stay on my Credit Report if I stay in Ch 13 or convert to a 7?

Thanks,

[emoney]

Did anyone tell you that BK would solve all of your problems?
The truth is that both you and Wells Fargo have a problem.
Foreclosures are like any other bad credit report, including a short sale, that will stay on your credit report for seven years.
regards,
emoney

[JollyGG]

If conversion to a chapter 7 is an option that is deffinately what I would do.
However, you really need to do what is right for you.

The forclosure should be listed as simply IIB not as a forclosure.

[ChaserRu]

Wells Fargo is really backed up with short sales so I've heard. If your auction is in November, I'd pretty much consider the short sale a no go. Has someone come out to do an appraisal or BPO on your property for Wells? If not, you're talking 2 weeks for that to get done, plus approval.

You can't force someone to buy the property, you can only get the earnest money and possibly sue them for lost money for having to hold the property, but chances are it won't be worth it. Basically you'd win the earnest money.

Next question, was the earnest money received and deposited? If not, then it really isn't a contract.

[SinkingFast]

We went thru something similar years ago. Buyers backed out so we would not sign to cancel the sale agreement and refund their earnest money deposit. After all, if they back out, the earnest money is supposed to come to us, right??!!

WRONG!!

They sued us to get the money back. After they were the ones that backed out.

A year of legal wrangling back and forth. And $1200 in attny's/Motions filing fees for us, we agreed with the buyers to split the earnest money deposit and move on with our lives. We got back $500.

A few years later, we go to buy a car, and the finance guy from the bank calls. Something about a Judgement showing on our Credit Reports. Turns out, one of the Credit Bureaus had opened an office in the small town where this whole deal took place. Somebody went to the Court House, found the claim of law suit. Did not follow the paper trail to it's conclusion to see there was a settlement. Just listed the whole thing as a Judgement against us. We had to fax Court Certified docs to the Credit Bureau to have the Judgement removed.

Let it go and move on. While you might wanna teach them a lesson, it could well be more hassle than it's worth for you.