Hi Djwing79,

UGH...the world of short sales is complicated. I have MANY short sale listings, and have closed MANY short sales, however each one is different...each lender is different, each "investor" is different, each Mortgage Insurance company is different, etc...you get the idea. Unfortunately there is no uniform standard by which short sales are negotiated by listing agents. I wish there were one, because that would make LOTS of sense, but quite frankly, this market does not make a lot of sense.

Sue hit several nails on the head. Your agent needs to have a frank conversation with the listing agent to find out how this sale is being handled. Once an initial offer is received, the seller can opt to put all other offers into back-up position...those offers can be a higher NET value, or a lower NET value, but they will remain in back-up position until the primary offer is withdrawn. Other sellers will opt to continue to submit higher NET offers to the bank, regardless of order of submission. The listing agent will guide the seller in this regard.

The listing agent works for the seller, and has a fiduciary responsibility to the seller...NOT to the lender(s). The listing agent, working for the seller and in the seller's best interests, will have a gauge on how the best way to get the short sale approved. Some lenders, for example, Countrywide (now Bank of America) will not allow any substitution of an offer once the file gets to a certain point in short sale negotiation. Their approval specifically names the buyer, and the buyer's offer that has been approved. It is NOT assignable to another buyer. Hence, in an instance such as this, it makes not sense to continue to submit additional, higher NET value offers.

I am sure this is clear as mud, right? Again, urge your agent to have a conversation with the listing agent. Good luck to you in your home search.

Erin

The conversation for a short sale is between the listing agent and a negotiator, who represents the lender in approving less than the amount of the loan. (Behind the negotiator, can be a closer, and then the executve review committee and/or investors who actually make the decisions).

In many cases, as the seller themselves typically just approve any offers, and the listing agent will make a decision on how they present offers to the lender for approval. One may find, based on their experience, to present only the highest and best at the time of initial offer. Based on the submission of the complete short sale package, the lender will, at some point assign a negotiator to work with the seller and their realtor for final approval. That package is then presented up to the investor for final approval. All of which takes time.

What I want to clarify is that a short sale contingent status means one (or many) offers have been submitted to the lender. It does not indicate whether a negotiator has been assigned from the lender....yet.

At the point a negotiator is assigned, he's working the specific package presented and is not considering other offers that have come in since then. Personally, I will ask the negotiator if they are interested in all offers to date, or another selection method, but I've never had one who said 'Yes, send me the rest'.

the market is too confusing and 'highest and best' from the first time of submission is what's considered. Should that buyer have walked away by that point, then a new consideration is given for any buyers still interested. Then a new investor package has to be created for each individual buyer considered.

It just isn't simple when there is such a length of time between when offers are submitted to the bank, when a negotiator is assigned to consider offers, and whether the buyers are still in the game.

So in answer to your question, I would have your realtor ask the listing agent what their policy is with respect to submission of offers to this particular lender. All offers are normally in back up position, even if they're higher, in my experience, because no one wants to create a new approval package for the investors and keep starting over. But the answer is with the listing agent.

The short answer is no. The asset manager at the bank that holds the note is the person making the final decision. No two transactions are the same especially with short sales. There is very limited feedback from the asset manager about what they are looking for in an acceptable offer.
This can be a big problem for the agents who are still accepting offers for a short sale or have multiple offers on a short sale listing. All you can do is hang in there and hope.

Good luck,

James