Foreclosure in Paia>Question Details

Mr. A Mahmood, Both Buyer and Seller in Makawao, HI

In contract on short sale, Seller accepted contract 1 month ago and per listing agent, contract was submitted to Bank. WHY is property ACTIVE?

Asked by Mr. A Mahmood, Makawao, HI Sat Jun 26, 2010

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Mr. Mahmood,

Great question! Per our MLS rules and regulations this listing should be shown as Pending once the buyer and seller have an accepted contract. Just because the lien holder needs to approve the sale price and terms does not exempt the listing from being shown as Pending. If you could let me know the MLS # I could request a correction on that item. Please feel free to contact me directly via phone or email or text.

Aloha,
Georgie

Georgina M. Hunter "Georgie" R(S) e-Pro SFR
Jim Sanders Realty Inc. Paia Maui HI 96779
cell: 808 283-0635
toll free fax 1-888-875-1918
http://www.EastMaui.com
http://www.MyMauiBlog.com

"I want to help you reach your Real Estate goals."
2 votes Thank Flag Link Sat Jun 26, 2010
Mr. Mahmood,
The property should definitely be showing as Pending.

It is important for all to know that the Seller has an accepted offer on a shortsale property.

This should NOT however, deter other Buyers from placing a backup ofer; as we all know that many shortsales, do not come to fruition, and so often times backup offers end up closing.

Thank you,
Mark Morris R(S)
0 votes Thank Flag Link Wed Jul 11, 2012
The recent decision by the BOD was that if the seller has accepted the offer, the listing should show as Pending.

Important - Short Sale status update: At the last Board of Directors meeting, the handling of Short Sale status was revised. When an offer has been accepted "By the Seller" on a property in Short Sale, the status of the listing must be changed to Pending. It is no longer an option to leave it Active until Bank acceptance.

Mr. Mahmood, as I stated, if you would provide me with the MLS number or property address, I can see that the status is changed to Pending. We strive to have accurate information in our MLS.
0 votes Thank Flag Link Mon Jun 28, 2010
In Maui, we always have to keep the listing active until Bank signs off.JillyG
Web Reference: http://jillygmaui.com
0 votes Thank Flag Link Mon Jun 28, 2010
Aloha Mahmood,
I get frustrated with listing agents that do this as well. If I where the listing agent, I would place the listing on "pending cont. to show" The offer should be treated as if it where a "normal transaction". Even if the listing is on "pending" the seller can still recieve back up offers. (I get calls on my pending listings all the time!) For your best interest ,you should ask the listing agent how exactly they are handling this Short Sale deal. Just to make sure your time is not being wasted waiting for Bank Acceptance, You should be clear on whether your offer stays in that first position & have the listing agent clarify that any other offer that is being placed on this same property is beling placed in the "back up" position. Call me Crystal at (808) 298-3189 or Email me Crystal4Maui@gmail.com if you would like an experienced buyers agent to represent you. Mahalo and Best of Luck!
0 votes Thank Flag Link Sun Jun 27, 2010
As a loan officer I feel it's misleading to the public to have an offer in place and not show the property as contingent. I would contact Hawaii MLS to complain if you run across this type of transaction. It may or may not be illegal, but it's not in the publics best interest.
0 votes Thank Flag Link Sun Jun 27, 2010
It depends on the rules of the MLS. The answers given by the Maui agents below would be the ones relevant to your property. For HIS, which is the MLS for the Big Island and Kauai, it had been optional whether to keep the property Active (the argument in favor being that it is in the Seller's best interest to have back up offers) or mark Contingent (the argument being agents waste a lot of time setting up showings on something that already is moving through the process). As of July 1st that changes and we will also have to show properties as Contingent rather than Active once the offer is accepted by Seller to be submitted to the bank.
0 votes Thank Flag Link Sun Jun 27, 2010
I am not in your State and laws are different from State to State. This has been something that has been struggled with since short sales began to be the new market. My thoughts are if you have a buyer and seller signed contract the properpty needs to placed in "Contingency", "Active with Contract" "Active Continue to Show" status once there is an executed contract. The reason for this status is there is a contingency on the contract - You are waiting on the bank to approve the short sale.

Our MLS Board requires this and then we can still display this property on the internet because the seller needs people to know this is not a for sure sale and will continue to take back up offers. In some cases Realtors will try to get mulitple offers.

Let me just add that it is also important know how the offer was written and how the short sale addendum was set up. Our short sale addendum allows for multiple offers to go to the bank. I have a way of writing my short sale offers so only one offer goes to the seller and the bank then back up offers can be submitted. All parties have to agree.

You can see this is something you need to sit down with your agent and ask them questions. If you are not happy with how your current offer is written you can ask that it be changed with an addendum. If you agent is not the listing agent then there is little your agent can do but to strengthen your offer. Good luck
0 votes Thank Flag Link Sun Jun 27, 2010
As an example, in 1 of the 2 short sales I have in escrow, the bank came back with a counter offer after the home owner accepted, but before the bank appraisal was done. The owner had accepted the offer, but the bank had not. So, the lender had not accepted the offer. According to the Short Sale Addendum we use, time lines for escrow do not start until the bank or lender accepts.

In Honolulu, we would most likely change it to Active Continue to Show, if the home owner had accepted, but the bank had not. That signals that it is not going to close within 30 days, which is what we typically use for Pending. In any case, your agent needs to stay on top of it, or you need to keep in close contact with the listing agent to get available updates.

Frank
0 votes Thank Flag Link Sat Jun 26, 2010
Hi there:

Right, it should be Pending.

Goodluck.
Perry
0 votes Thank Flag Link Sat Jun 26, 2010
Mr. Mahmood,

There are multiple reasons this could happen:
1. Awaiting appraisal from the bank
2, Awaiting BPO or computer appraisal
3. Awaiting short sale approval.
4. Etc....

Here's an excellent similar question with details:
http://www.trulia.com/voices/Home_Buying/How_long_does_a_BPO…

In the meantime, the agent wants to keep their options open. Typically in the agent's remarks on the listing (not visible to the public), the agent will update the status periodically, e.g. it will say "1 offer accepted, two backups in hand. Awaiting BPO."

Aloha,
Frank
0 votes Thank Flag Link Sat Jun 26, 2010
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