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Neal, Home Buyer in Rahway, NJ

If I have an offer in on a short-sale property, can someone else come in and outbid me?

Asked by Neal, Rahway, NJ Wed May 13, 2009

Or is the property off the map until a decision is made on my offer by the bank?

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Answers

19
It depends on how your offer is written, what is stated on the Short Sale Addendum, and whether the Seller agrees and signs it. Make sure your agent knows this is a concern to you, you don't want anything assumed.
1 vote Thank Flag Link Wed Jan 5, 2011
Make sure that line 5 on the short sale addendum is crossed out otherwise the seller can take multiple offers.
1 vote Thank Flag Link Tue Jul 27, 2010
It is ironic, had someone call me this week with this same question. Obviously, there are some inexperienced Realtors dabbling in shortsales that need to be more Customer oreiented and be pro-active with by having an experienced mentor (Realtor) to be guiding them.

At first the Banks dictated whether they wanted all offers or just the first one, and some may still try to dictate it. However, vnw with the new Shortsale Addendum (Florida) it has an area for your Realtor to specify regarding back-ups and whether all offers will be presented. If the Listing agent responds negatively to the addendum stating that all other offers will be held as back-ups, then it is the responsibility of your Realtor to discuss this with their Customer. Upon the Realtor laying out the scenario of the Seller refusing to give up the right to take and present other offers, then the properly informed Customer decision is their own whether they want to sit and wait to see which offer the bank is going to pick ( in the meantime, wasting your time if your offer is not picked ), or to cancel the contract and move on to another property.

READ the contracts that your Realtors place in front of you, the proof in the pudding as they say.

Obviously, in this young lady's instance, this was not the case. Shortsales are complex and only Realtors that are experienced dealing with them should be writing contracts on them, or in the least be mentored by someone with experience.

jim
0 votes Thank Flag Link Fri Apr 15, 2011
Each bank is different, in the past the banks would only entertain and negotiate with one offer at a time however I do not know this to be true in every situation or bank.

Mary Carlson
Crye-Leike Realtors Multi Million Dollar Club
Prompt Service with Integrity
423-593-3370
Selling Chattanooga and North Georgia since 2000
0 votes Thank Flag Link Wed Feb 2, 2011
Neal,

You want to make sure your offer is written in such a manner that the contract has to be signed and executed to be presented to the bank and that additional offers [even higher ones] are in a back-up position to your offer. Since you seemed concerned about being theonly offer in the mix. I would also make sur eyour offer states that the property is to be listed as pending in the MLS.

At Market America Realty & Investments we handle alot of bank listings and short sales and are skilled in the nuances of these types of deals.

Joshua S. Unger (941) 306-9380
0 votes Thank Flag Link Wed Feb 2, 2011
Usual process is - buyer submits offer on short sale - seller signs it - that offer/contract is submitted to sellers lender along with other documents (short sale packet) - the sellers bank now considers that offer along with going through documents to see if there is an actual distress and wether lenders investors will accept the offer based on their criteria

Bottom line - once the lender receives the first offer from seller along with packet - the lender begins working on that offer - not - multiple offers - even if a higher offer had been submitted to the seller (actual owner of house) - these are usually treated as back-up offers - and held by sellers agent

Of course there are variables to anything depending on the way contract was written or flexibility of sellers lender - however - that is the usual process

Carmelo Burgos Jr. - CDPE, SFR
RE/MAX Realty Team
239-462-6478 - cell
866-384-0453 - efax
cbjreal@gmail.com
0 votes Thank Flag Link Wed Feb 2, 2011
Yes, if the contract allows the seller to continue to market the property and accept offers. No, if the short sale agreement specifies.

Steve Geving
Jones and Co Realty
239-573-1400
0 votes Thank Flag Link Wed Dec 29, 2010
It depends how your contract is written. WIth the right agent and the correct language this can be avoided.
0 votes Thank Flag Link Wed Aug 25, 2010
Not if I am the listing agent! First, the seller and I make a decision to only accept reasonable offers. Then, when one comes in, it is the only one turned into the bank for consideration. Anything else is a BACK-UP offer. Just like it would be if there were no bank approval needed.

This is what is fair to both the buyer and the seller. On average a buyer waits 4 months to close here. It is not "fair" to kick them out. Second, with many banks, the whole process starts over with a new offer delaying the lender's decision. The "seller" in a short sale is usually "in trouble" and cannot keep starting over and waiting for an answer.

Now the second part of your question, Is the property off the map until a decision is made? Yes and no. There will be no more offers turned into the bank for consideration until yours is considered. However, as an agent, I will still market and if someone is interested--show the property but, again any offer is considered a back-up offer to yours. I have had a "HOT" property with 4 back-up offers and the first buyer walked. Each offer was contacted and all had found other properties except those in fouth position--they got the house! So, sometimes good things do come to those that wait.

Also, realize that I work for the seller, not their lender. My job is to get the process completed for the seller. That does, however, include getting an agreement by the bank. But, if you start off with a reasonable offer you are half way there!

Judy Ramage, ReMax Realty Team, Cape Coral, FL
Web Reference: http://www.judyramage.com
0 votes Thank Flag Link Wed Aug 25, 2010
Hi Neal:
Unfortunately yes.. even if the seller signed the offer. The Bank or lender/investor has the final say..They also frequently will ask for an updated appraisal which might force all offers to compete with an updated value as a result of the appraisal.
Hope this helps
Ann Stone
Pro-Gulf Properties, LLC Cape Coral, FL
Web Reference: http://www.pro-gulf.com
0 votes Thank Flag Link Wed Aug 4, 2010
Unfortunately it became a moot point when the owner filed for bankruptcy. We attempted to separate the house from the bankruptcy - the bank agreed, the attorney agreed, and the judge agreed - but not the owner. So now the house sits and rots, kids break in, and the owner gets more liens filed against her for not keeping the property up. What a waste!
Needless to say, we found another house!
0 votes Thank Flag Link Wed Jul 21, 2010
If the seller signs the offer making it a contract then they can only take backups. Unfortunately a few listing agents will keep the property active and still take offers on short sales playing a game with the buyers
Web Reference: http://sellmypbchomes.com
0 votes Thank Flag Link Wed Jul 21, 2010
With the state of real Estate today, it can happen. Normally, when a seller receives an offer, the agent will put the listing in a "Sale Pending" status. Unfortunately, that doesn't happen in todays world.
0 votes Thank Flag Link Wed Jul 21, 2010
Neal
That is what is so wrong in real estate right now. The listing agents hold all the cards. Legally the listing agents are to present all offers but some banks don't want multiple offers. Every deal now is different. There really is no way to prove that the listing agent is acting fair in any deal. The listing agents are under extreme pressure to get as much money as possible for the banks so they will lie to make people bid higher. If an agent proves that they can get alot of money for the banks then the banks will keep feeding them REO's. If they can't then they will go to another agent. I am making offers all day long down here in Florida and sometimes I get a quick response and sometimes I don't. It all depends on the listing agent, where the original owner is and what bank are we working with.
If I were u I would ask the listing agent when you make an offer "Am I the only offer on the table" If they say yes tell them that you would like to make and offer and after I make an offer I want the property to show on the MLS as "Active Contingent" instead of active until you here back from the seller. That way all the investors will see that it does have an offer and they will go to the next one. But if the listing agent keeps it on the MLS as active then you could get multiple offers bidding against u. Right now I am going through a similiar situation. I bid 69,000 for a home and the listing agent cant find the owner. The owner accepted my contract 35 days later. Luckily its the slow season here and I didn't get any other offers to compete against mine.
I hope that helps you. Please call me if you have any questions. Or you can email me at jtbcorporation@yahoo.com
0 votes Thank Flag Link Wed Jul 21, 2010
The house was actually taken off the market - we accidently came across it and had our agent inquire about it. We were asked to make an offer, it was signed by the seller, and now it is in s/s limbo. Just don't want to lose it!
0 votes Thank Flag Link Tue May 26, 2009
Unfortunately, there is not a firm hard set of rules in place surrounding short sale transactions. Much of the outcome has significantly more to due do with factors outside of the buyers control like severity of seller hardship, amount of mortgage, presence of second mortgage, liens, work load of lender etc.

Here is a recent blog post detailing the questions that every short sale buyer should be asking about their transaction: http://www.gulfreturns.com/2008/09/buyer-tip-short-sale-ques…
0 votes Thank Flag Link Thu May 14, 2009
Hi Neal,
It depends on how the offer was written, signed by the seller (or not) and presented to the bank. If more than one offer is presented to the bank, most banks will want the most they can get. I have seen a few that did not work that way but certainly not the norm.
Best of luck,
Nancy

Nancy Doyle
239-209-2237
http://www.nancyd.listingbook.com
Sellstate Professional
0 votes Thank Flag Link Wed May 13, 2009
It depends on what kind of agreement was entered into........most likely yes you can be outbid. The normal SS addendum states that the sellers may leave on the market to receive multiple offers if they choose to do so.
0 votes Thank Flag Link Wed May 13, 2009
Neal,

Someone technically can come in and outbid you. However, what happens after you submit the offer will depend completely on the way your offer was structured. The seller and buyer can agree that all subsequent offers will be accepted as a backup only upon acceptance of your offer. This is definitely something to discuss with your agent at the time of writing an offer on a property that you like.

I hope this answers your question. If you need more clarification please feel free to call/text/email me.

Have a great evening!

Danielle Sharp
Broker Assoc
Vadala Realty

Direct 239.471.2102
Cell 248.207.4445
sharphomes@yahoo.com
0 votes Thank Flag Link Wed May 13, 2009
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