Law talk: Short sale involves a third party

Q. My wife and I are trying to purchase a duplex on a short sale. It was listed online for $84,900. We submitted an offer of $79,900. The real estate company representing the bank and the current occupants accepted the bid and we gave the real estate company $1,000 earnest money.

We had an inspector out to the property whom we paid for separately and we set up a closing for 45 days. Now the bank has counter offered at $90,000. This seems shady and unethical. What should we do? If the real estate is published at $84,900 for the selling price, does the bank have to honor that price? Any help will be greatly appreciated.

A. The seller is not bound by the listing price. The seller is bound by the contract price. Also, keep in mind the seller is not the “bank.” The seller is the current owner(s).

It is also important to understand there are three parties required to make a short sale work: purchaser, seller and mortgage holder/bank. In non-short sale transactions, the mortgage holder is irrelevant, because they will be paid in full upon the closing of the transaction. In a short sale, the mortgage holder must agree to accept a lesser sum than what is owed to it.

So, just because your seller agreed to accept $79,900 doesn’t mean the bank has agreed to accept the payoff to it based on that price.

What appears to have occurred is that the mortgage holder reviewed the contract, performed an appraisal and decided the property was worth more. The mortgage holder, not the seller, is essentially making the counter-offer. The mortgage holder is saying they are willing to take a loss on the property, just not as large of a loss as a sale price of $79,900 will provide.

Of course, you have the option of not accepting their counter-offer. You must determine if the property is still an attractive value at the increased price. If it is not, walk away, or counter-offer. If you walk away, your earnest money will be refunded, though you lose the cost of the inspection.

Q. My wife and I bought a home in Elk Grove Village in 1999. We are both on title but the mortgage is in my name only. In May 2010, she abandoned our marriage and the house. We divorced in May 2011 but left the property listed under both names to make the divorce seem easier.

I have paid 100 percent of all bills, taxes, insurance and maintenance since May of 2010.

My questions are:

1) Has she forfeited any claims to profits on the house because of the abandonment?

2) Would she be liable to pay half the money owed at a closing if I could not get equal value for the house during a sale?

3) Would I have legal recourse to go after her for half of all the mortgage, property taxes and house insurance since the abandonment?

Thank you very much.

A. This is not really a real estate question; it is a family law question that involves real estate. However, the answer to your question is pretty simple: Look at your Judgment for Dissolution of Marriage. It should specify the rights and obligations of the parties as they relate to the former marital residence.

Ÿ Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tdr100@hotmail.com or call (847) 359-8983.