First, and most importantly, there is a real "grey area" in terms of the Seller accepting more than one offer. Legally, we are all taught that a Seller can only accept one offer. The confusion that comes up in a short sale is "Who is the Seller?". Quite simply, the Seller is the Borrower. While the lender makes the ultimate decision on whether or not to accept the short sale offer, my client is still the Seller/Borrower. If I advise my client to accept multiple offers, I feel that I am opening up myself and my client to a potential legal claim, as we have accepted multiple offers. I have spoken to numerous real estate attorneys about this very issue, and have received various legal opinions. In the end, I felt it best to fall on the safe side, and advise against executing more than one contract.
Now, some agents will say, "Why don't you just tell your Seller to send the offer(s) to the lender without accepting (signing) the contract?" Again, very simple. Without acknowledgement (Sellers signature), we don't have an enforceable contract. Better yet, we don't have a contract. How many lenders do you think will consider a contract that isn't signed by both parties? And, if you are representing the Buyer, do you feel comfortable being in escrow on an unenforceable contract?
The other problem with submitting multiple offers is the confusion it causes with most lenders. Let's face it, they have plenty on their plate already. Why drag out an already long/tedious process by submitting multiple offers? Again, if the lender specifically asks that back-up offers be submitted, we oblige and send them in, with one caveat....WE DON'T ALLOW OUR CLIENTS TO SIGN THEM!
I actually wrote a blog on this very topic on Trulia on June 26, 2009, titled "Multiple Offers On A Scottsdale Short Sale". Feel free to visit for more information. Or, feel free to visit http://www.foreclosureuturn.com. We have tons of information on the entire short sale process on the site. Until then, good luck!
The final strategy should be decide by the seller (owner) based on the input and information provided by his agent. The listing agent has to submit all the offers to the seller, but the seller can choose not to consider an offer if he does not think is a good offer.
In order to be succesful on a bid for a short sale there are a lot of questions, follow up and investigations that your agent needs to do. Without the proper information you might waste many months waiting for something that might have no chance of happening.
Also remember that the listing agent has the duty to represent and protect the seller and not the buyer. So you should not just rely on his information - you will need an experienced short sale agent on your side.
Carlos J. Ramirez, PC, ABR, CNE
Associate Broker, HomeSmart -
Many buyers are asking if their offer will be the only one submitted to the lender and not participating if it is a multiple offer deal. We are among that group unless our client asks to do otherwise.
The chance of closing escrow in a multiple offer scenario is very bad for a buyer. The odds of closing escrow on a short sale are generally thought to be under 10% depending on lender, number of loans against the property, liens and other factors. If you add multiple offers to the mix, the odds of any one of those offers crossing the finish line is much less.
As real estate agents, our fiduciary responsibility is to our client. In a short sale, our client is the buyer and/or seller, not the bank.
The short sale addenda is very clear on offers on line 13-14.
The addenda states that "nothing shall limit a seller from accepting subsequent offers from subsequent buyers and submitting backup offers for the sellers creditor for consideration".
The agents by rule are obligated to "present all offers".
There are ARMLS rules for how a property is listed according to the offers, but that is a different subject.
Signature Realty Group
2008-2009 Master of Real Estate Award
If they are submitting multiple offers, the bank will review them and may or may not accept one of them. During this period the home can remain in ACTIVE position on ARMLS and other offers may continue to come in and be submitted.
If they submit just one offer the home will go to the AWC-I or Pending category on ARMLS and subsequent offers will be held in back up position.
I just posted an article on short sales on our blog site this afternoon if you want some extra reading.
Hope this helps,
As Rod states, this is a great question that you should ask to your agent. If you are not using a buyer's agent, this is a prime reason why you should. In any case, direct communication with the agent(s) involved would garner you the most accurate answer.