ask george & chuck
Sept. 12, 2009

Foreclosures and short sales, terminating listing contracts
Answers to real estate questions as appearing
in the Houston Chronicle

Dear George: We want to buy a house that is listed with a REALTOR®. However, the owner now wants to sell the home without the REALTOR®, and we'd like to buy it that way. Is there a way the owner can get out of the contract?

Answer: There may be a way the owner can get out of the contract with the REALTOR®, but he has to prove that the REALTOR® has not served the owner's best interests. In such a case, the owner/seller can terminate the listing but may still be liable to pay the REALTOR®'s commission. Just because neither you nor the seller want to pay a commission doesn't mean the seller can disregard his contract with the REALTOR®.

Dear George: What are the differences between a foreclosure and a short sale?

Answer: A foreclosure and a short sale are different transactions, but they also share certain similarities. For example, sellers in both are unable or unwilling to continue paying the mortgage loan to the lender. Some of the major differences are that in a short sale, the homeowner is seeking the help of a third party, usually a REALTOR®, to convince the lender to accept an offer less than the amount owed on the loan. In a foreclosure, the lender takes title to the subject property. In a successful short sale, the purchaser completes the sale of the property and the seller mostly, but not entirely, avoids the problems associated with a foreclosure.