The listing agent is obligated to make the seller aware of all offers until close of escrow, unless they've been instructed by the seller that they no longer wish to consider any that may be received once the escrow has been opened.

Dear Curious: A listing agent is obliged to present all offers to a seller, whether normal, bank owned or short sale. Until the seller signs and the listing agent communicates that acceptance to the buyer, the property is still "active" and offers can be submitted and "should" be submitted by the listing agent to the seller.

However, the reality is in this seller's market, that those Sellers can almost do whatever they want. What is happening in today's market, is the seller is accepting the highest and best offer and is instructing the listing agents to submit only the highest and best to them in the case of multiple offers in the case of bank owned properties. Short sales and normal sales are handled differently.

If you are concerned that your offer has not been submitted on a listing by the listing agent, ask them if your's is the highest and best. If not, make it your highest and best offer.

Curious, I think some of the nuances of dealing with bank owned listings and short sale listings have skewed some of the same procedures as always expected.

Asset managers of bank owned properties normally receive the terms of the offers via a data system, never seeing the original CA purchase agreement of all offers. They then negotiate verbally before selecting an offer. Then they send a national contract, called an amendment to supercede many of the original terms. And the response times can be up to two to three weeks. Once the initial set is in review, no other offers are normally presented because of instructions by the asset manager. He's dealing with many properties and once he's in process of review, he/she doesn't want more offers in the mix.

In the case of short sales, once the status changes to Active short cont., the lender has been submitted a short sale package from the seller for approval. That includes a hardship letter, financial information from the seller, the listing agreement, and the top purchase offer as selected by the seller, as well as a net sheet. When the lender approves the short sale it is specifically an approval naming the buyer from the selected offer. Unless that buyer has walked, another buyer's offer will not be considered by the lender, even if it's better price and terms. In this case, the seller doesn't care what the other offer is, they're not receiving any proceeds from the sale anyway.

It's a different world these days, and these changes are more recent in the last year and keep changing. That's why, even more than ever, it's important to work with a full time realtor to maximize your chance of having an offer considered and accepted.

Hello Curious and thanks for your question.

Until the seller actually accepts and affixes his/her signature to the bottom of a purchase contract, and unless the seller tells the agent "I do not want to see any other offers", the agent may present other offers. Typically, if the new offer is lower than the offer already being reviewed, it makes little, if any, sense to tender that second offer to the seller since a higher offer is already being proferred.

However, if the seller has already accepted an offer and is in contract, then we do not normally tender other offers except to tell the buyer that they can be a "backup offer" in the event that the first offer falls through. In most cases, this is true for short sales, so a backup offer is always appreciated. Otherwise, once a home is in contract, no further offers are accepted or reviewed.

And, Curious, it was never a "law" in California that offers had to be presented. In fact, I know many Realtors who will not even present a "low ball" offer to the seller, and there is no imperative that an agent "must" present any unqualified offers to the seller. It's our job to weed out or to direct buyers to the requirements necessary to make a qualified offer that can be submitted to the seller.

Hope this helps!

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty