Home Buying in San Ramon>Question Details

lilyzhao, Home Buyer in Merced County, CA

Is listing agent practicing correctly with short sale offer?

Asked by lilyzhao, Merced County, CA Mon Sep 10, 2012

A short sale house listed just four hours ago, I called to ask if I can make an offer with full listing price and all cash offer. However, the listing agent told me she has had an offer. I asked I could increase 5k or more. She said her current offer was way higher than the listing price. After four months, I found the house was sold exact as listing price. I wonder if the listing agent should practice this way. Any comments? Thanks.

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Bernard is correct as usual as well ...
0 votes Thank Flag Link Wed Nov 21, 2012
And in the few cases when the lender will allow the same agent to represent both sides, they typically slash the commission they are willing to pay so the agent ends up doing twice as much work for the same return.
0 votes Thank Flag Link Wed Nov 21, 2012
Potential Buyer:

Agree with Pacita (as usual) - many short sale lenders do not want the same agent on both sides of the table.
0 votes Thank Flag Link Wed Nov 21, 2012
To Potential Buyer:

Hiring the listing agent may not always be advisable nor permissible since the majority of the short sale lenders require an affidavit of arms-length transaction between the buyer and the seller as well as the agents. Some lenders may not want the same agent representing both the buyer and the sellers.
0 votes Thank Flag Link Tue Nov 20, 2012
Best bet on the short sale is to hire the listing agent :)
0 votes Thank Flag Link Tue Nov 20, 2012

Hard to answer with limited information, but there is generally a lot of stuff going on behind the scenes. How far along was the first offer before you made yours? If the first offer has a good chance of succeeding, the realtor will usually not jeopardize the sale. In most cases, banks only give 1 or 2 chances for short sale offers to be presented before forcing the owner to go into foreclosure or accept a deed in lieu. There are too many factors here at play to ascertain what may have happened exactly.
0 votes Thank Flag Link Mon Oct 1, 2012
Hi Lily,

I would have to agree with the Realtors who have commented below. I won't repeat the answers. Your best bet in finding a home is to hire a local San Ramon Realtor to represent YOU. Find someone who knows the area and has a good pulse of what homes are selling for. I'm sure with a little time and some hard work, you'll find another home which may or may not be a short sale.

Best Regards,

0 votes Thank Flag Link Mon Oct 1, 2012
The sale of a home is between the seller and the buyer. The real estate agent for the seller has fiduciary responsibility to the seller. There still isn't enough information to determine if this was a "fair" transaction. If you were representing yourself on this transaction, you might want to consider asking a real estate agent to represent you on the next opportunity. This agent will have fiduciary responsibility to you, and may be in a position to get more information before you make an offer.

Hope this helps.

Sally Blaze
0 votes Thank Flag Link Tue Sep 11, 2012
There are still so many possibities here. You don't know what you don't know.

The listing agents primary fiduciary responsibility is to the seller and the seller gor exactly what he wanted. Fairness to short sale bank does not really enter into it. They stated what they would accept and they got it so that sounds pretty fair.

Finally, yes, the seller has every right to select the buyer (other than non-arm-length sitiations). The contarcts is between the seller and the buyer. The lender is not a party to the transaction.
0 votes Thank Flag Link Tue Sep 11, 2012
Thanks for all for your input. I checked county recorder, the short sale was an all cash offer. So there was no appraisal effect for possible price drop. I checked other three exact same houses on the street, they were sold recently (July, Aug, and Sept), with at least 15k above for a ~150k house. I just wonder if this was fair to listing agent even did allow for an offer after it was listed for only four hours. Is this fair to short sale bank? Because they are rely on listing agent's info to take offer. If listing agent only submits offers she is dual agent, is this fair game? This was not the first time it happened, perhaps, not the last one. Will the agent's license be risked by such conduct?

One more question, does seller has a say to select buyer for short sale property? What about sell to a friend, though I know there is ARM disclosure. It seemed like this is case.

Thanks for any coments.
0 votes Thank Flag Link Tue Sep 11, 2012
There are so many unknowns here

Price isn't the only factor in a short sale. Terms are frequently what sinks or elevates a short sale offer

For example, when writing an offer on a short sale, did you/your agent
--- ask for repairs and credits? More than likely, the short sale lender won't approve there
--- ask for seller to pay for delinquent HOA fees and fines? Again, these property won't fly
--- ask for seller to pay for closing costs? And the answer is...you guessed it, probably no
--- and even if your offer was for all cash, but you asked for all kinds of concessions, more than likely your offer won't be accepted either.

On a short sale, it truly helps to have seasoned agents at both ends. This is not the time to learn on the job. If it's someone's first time, that person should look for the best possible guidance/mentor possible to help with the offer.

Good luck next time
0 votes Thank Flag Link Mon Sep 10, 2012
Without knowing all the facts it’s impossible to know what is going on. Bernarad has suggested on scenario, in truth, there are many potential reasons. As an example, there may have been a lien on the property – in some situations, we’ve lower the offered price and diverted funds to pay off the lien.

You never know.

To wonder if the agent should practice this way might be a bit presumptuous. At the end of the day, the listing agent is responsible to the seller, not a buyer with an offer. The goal of a short sale is to put together a package that will be acceptable to the bank so that the SELLER can get out from underneath the home and the mortgage obligations. It might be hard to believe, but in some cases, it really doesn’t make sense to accept the highest offer. In ALL cases, the goal is for the listing agent to secure a sale that works in the best interests of the seller and the bank. In this case, it looks like they succeeded.

So I’d say that as the seller who hired them is concerned, it seems to me like their realtor did exactly what they were hired to do.
0 votes Thank Flag Link Mon Sep 10, 2012
I agree with Bernard.So many things happen behind the scenes.There is no way to say for sure whether that was the orifnial buyer, or if there was a price re-negotiation.
0 votes Thank Flag Link Mon Sep 10, 2012
It is impossible to answer without knowing all the details. In a short sale the seller does select what offer is submitted to the bank for consideration and should ideally be the highest and best price that the market will allow. If the seller had not already accepted an offer then you should have been allowed to submit an offer. Again the seller does still retain the right to select the offer submitted to the bank. It could have also been an appraisal issue or repairs that could have influenced the final sales price. With so little inventory it is difficult to get offers accepted but have faith in your agent to keep you aware of market activity.
Good Luck, Debbie Olson Sothebys international realty Debbie.olson@sothebysrealty.com
0 votes Thank Flag Link Mon Sep 10, 2012
You really never know what is going on during the course of a transaction. It may be that everything you were told was correct but subsequent inspections may have revealed a sufficiently serious defect to justify the sale price being renegotiated.
0 votes Thank Flag Link Mon Sep 10, 2012
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