Thread: Short Sale Questions?

Originally Posted by evilwayz

I recently found a property in AZ that I am interested in that is a short sale. As I was getting pre-approved an offer was submitted to the bank. I was told that I cannot put in an offer now until the bank makes a decision on the first offer. If the bank doesn't accept than the first person to offer has a chance to counter again before I can put in an offer. Is this true or can my agent put my offer in with the other offer at the same time?

Who the heck is telling you that? Some NEWBIE Realtor?? Lenders LOVE getting multiple offers, since if one comes in HIGHER that another, they can consider the higher offer. I would seriously consider that either the agent doesn't know their butt from a hole in the ground, or something shady is going on... Maybe the other offer was from THEM, and they are trying to get is pushed through. (Something to consider.)

In ANY CASE, I would look for another agent, because they don't have a clue with how lenders handle SS. Short selling is hard enough, you don't need some agent that doesn't know what they are doing to even impede the transaction even more!

Later!

If you request the offer to be submitted then they need to submit it no matter what. Let the bank shred if they want that is up to them to do not the listing agent.

I am experienced in short sale and unfortunately that is true. Unless it is truly an offer and not a contract. If it has already been submitted to the bank it should be a contract. Short sale banks normally want a ratified contract between a buyer and seller and therefore the offer would have had to been signed by the buyer and seller. Also as a buyer and buyers agent I would demand that.
The buyers and sellers are the parties of the contract, not the bank. The approval from the short sale bank is just a contingency like any other contingency.
Of course some agents will try to submit multiple contracts although that is not legal. They can submit multiple offers but in that case nothing is the offer is binding until it is signed by the parties and for example the buyer can just say "see ya" at any minute.
Our MLS even requires that all short sale contracts be listing in the MLS as under contract. We cannot keep them as active in hopes of getting more offers.
Sure the banks would like to see multiple offers to pick which they want but unfortunately they ARE NOT a party to the contract and it is not their decision to pick. Of course they can counter or reject approving the stipulations of the contract but they are still considered a contingency just as a home inspection is a contingency. Don't let any agent tell you otherwise. They just don't know. We have been in long talks with attorneys about this and this is how it needs to be done.
I wish myself many times that this wasn't true because I would love to keep it as active and receive multiple offers so as to try to get the one most likely of being approved by the banks.
Plus these banks are so overwhelmed and confused anyway that having multiple offers sitting on their desks just confuse them more. I have a while back submitted multiple offers and one time one of the offers backed out. I contacted them and told them this. Of course you never get to talk to the negotiator handling it until it is assigned to one. Wouldn't you know about 3 weeks later they said they would approve the one that I already told them withdrew. That again is why it is good to have a contract and not an offer because I would have made sure that is said in the contract the approval could take up to say...45 days. So the buyer did back out before then they will lose their deposit.

In a short sale, offers don't get submitted to the bank. The bank won't look at offers. The bank only wants to look at a contract between the seller and the buyer.

In this case there is already a contract in place so the best you can do is have your offer accepted by the seller as a back up contract. Then, if the bank rejects the first contract they will look at your back up contract.

Your best bet is to start looking for another house or wait for this one to go to foreclosure. The closing rate on short sales in not very good.

Just to chime in on this as well, my wife and I just put an offer in on a short sale. The offer was accepted by the seller and the fully executed contract was then forwarded to the third party lender pending approval. There was an attached addendum from the title company stating that while they could entertain back up offers, such offers WILL NOT be submitted to the bank until or unless the initial offer (ours) is rejected by the bank.