Home Buying in 94587>Question Details

Taiba, Home Buyer in 94587

I put an offer on the house that came on market on 2/25/11 and their agent is refusing to submit it to the bank. Is this legal? pls help, thank you

Asked by Taiba, 94587 Mon Feb 28, 2011

That is according to my agent. The property is a short sale. I have put in the full asking price of 360 K and have asked for 10K credit from the bank/seller.

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The Medford Team’s answer

At $360,000, the LIST price was right on target for the area comps. Contrary to some of the suggestions below, it is very possible to get credits from the seller when buying a short sale – we do it all the time. HOWEVER, this is a fairly active area and it’s very likely that the property garnered multiple offers. We had a short sale on the next block and we received numerous offers on our listing. By asking for a credit, your net to the seller was more than likely lower than other offers. It is normal practice to only submit one offer to the bank – and the sellers take the best price, best loan and best terms.

All too often, buyers fail to understand basic market fundamentals when making an offer. Frequently buyers come up with their own calculations of what they think a property is worth and then offer only that amount … thinking that the sellers will agree with your computations. In reality, you have to offer what the market will bear AND what the seller is looking for. And, just as frequently, buyer’s agents don’t do the necessary footwork to determine whether or not there are other offers and exactly what the seller might be looking for. A rule of thumb in that neighborhood for multiple offers: list price PLUS $5,000 for every offer submitted including yours.

My opinion? You should have increased your offering price so that the net to the seller was more in line with what they were asking for and factored in a higher price to account for multiple offers …
0 votes Thank Flag Link Sat Apr 9, 2011
Hi Mono,

As the agents below have mentioned, the agent needs to present all offers to the seller. The seller will obvoiusly accept the offer with the best price and terms. If there were multiple offers, asking for $10K in closing costs was not a good idea.

The agent will advice and council the seller about the best terms in an offer and it is the seller's decision after that. Some agents are not excited about FHA loans (although all my 5 recent FHA loans sales closed on time and were painless). They prefer a conventional loan with more than 20% down payment. So if they have a choice, they will take that offer.

Very often the bank in a short sale transaction will come back and ask for more money ( after they do their appraisal). So in your case if you are at asking price and need closing costs back, it may not seem a strong offer. You may not be able to go higher in the price or give up the closing costs and the agent may have to put the house back on the market at that time after working so many months on the short sale negotiation.

Your agent can always ask the sellers agent to sign on the rejection area of the contract on page 8 so you know that your offer was at least presented to the seller.

Buyers don't understand that multiple offers are back and properties are selling over asking price once again. Since the prices have come down substantially and interest rates are so low, there are a lot of buyers looking for a home so you need to put your best foot forward.

Meena Gujral
1 vote Thank Flag Link Tue Mar 1, 2011

In a short sale, the 10k credit is probably the issue. If they have an approved price at 360 or comps are at or around that 360k number the seller and agent can decline your offer since the probability of acceptance is low or unlikely. (I am amking a lot of assumptions about the sellers agent here so I reserve the right to be completely incorrect on this).
0 votes Thank Flag Link Tue Mar 1, 2011
All offers must be submitted to the seller who has the option of signing or not. Ask your agent to verify that your offer was submitted to the seller. If they accepted it, then it would be submitted to the bank for approval.
0 votes Thank Flag Link Tue Mar 1, 2011
At this point, it's still the seller's call as to which offer to accept and to forward to the bank.

If the seller has other offers (better and higher) than yours, and the seller has selected one that has the best chance of getting approved, the seller may choose to send that offer instead.

Just because you offered at list price, doesn't mean your offer is the best and highest, especially since you're asking for 10K credits.

Some lenders will ask for the top 2 offers....so if you're in back up position, your offer may be submitted as well...but the seller must still accept your offer. Otherwise, it's just an offer -- like unrequited love.
0 votes Thank Flag Link Mon Feb 28, 2011
Hi Mono,
You need to communicate with your agent and have your agent talk to the other agent or their Broker. The offer will need the sellers signature before submitting to the short sale lender. You need to find out what the delay is, your agent should be able to get to the bottom of this.
0 votes Thank Flag Link Mon Feb 28, 2011
Hello Mono,

If the seller has accepted your offer, then the agent must submit it to the bank. If not, then there is no reason for the agent to submit it as it will not be accepted by the bank either.

You should always make sure you are working with a knowledgable agent. Good luck.
0 votes Thank Flag Link Mon Feb 28, 2011
Did the agent submit the offer to the homeowner? Without their approval, the agent can't send the offer to the bank.

If the seller is in a short sale situation, where is the seller suppose to come up with the 10k credit?
0 votes Thank Flag Link Mon Feb 28, 2011
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