jimmy, the listing you placed a “successful” (lol) offer on should have been advertised as a short sale from the get go, and thus, required no earnest money deposit. In essence, you are purchasing a “short sale” from the lending institution because your “seller” has no authority to sell, due to negative equity. Your agent should have been more proactive in finding out out the true status of the encumbrances before you spent money satisfying your contingencies, IMHO.
For example, it is easy to see online whether a SD County property owner is delinquent on their taxes … or not, BEFORE one even places an offer.
Because your agent did you this HUGE disservice, I would drop them like a hot potato after I received my earnest money check back due to specific performance issues, mainly to do with the fact that seller’s can’t perform before your rate lock expires, and, in any case, “sellers” have no authority to convey the property.
In your case, the exception of the unpaid taxes on your preliminary title report which you were privy to early on after you opened escrow should have been a “red flag” to your agent to wait for complete lender approval before spending any time or money on this transaction.
If I were you, I would not spend $90 per day to keep my “lock” open on this flaky transaction as you describe it here. Anything can happen, including foreclosure documents being filed by a hired trustee simultaneous to your “sellers” trying to negotiate a “short payoff” with their servicer/lender. This should have been initated by their (incompetent) listing agent months ago.
Lesson learned: as a buyer, either YOU and/or your agent should be checking out sellers’ financial condition and writing your offers explicitly to protect YOU in whatever condition you find them to be in on properties you choose to make an offer on. It will save you a lot of wasted time and money.
