Home Buying in Fort Wayne>Question Details

Crroth07, Home Buyer in Fort Wayne, IN

Listing Agent agreed to sell house but said had to get bank approval. 2 months later listing agent makes "counter-offer"

Asked by Crroth07, Fort Wayne, IN Mon May 10, 2010

We accepted the offer and wrote up the purchase agreement. Listing Agent COUNTERS the offer with a diff offer but settles on the orginal. Then says deal should close within 30 days. After getting the inspection the listing agent informs that the house hasn't been been approved for sale and has liens, Listing agent then informs us they are turning sale over to a "middle-man." From which we were told they it could take another 5-6 months to close the deal. We have been lving month to month on a higher lease. If we would have known 4 months ago we could have adjusted our lease rate and/or started lloking for another home. Now we are paying more money monthly and still don't have any better answers and could lose the tax credit we had anticipated using to do some of the needed repairs. If we end up without the tax credit we may not have accepted a higher offer on the house and/or would have offered less to account for repairs being needed. Can we go after Lisitn agent

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Kent Gagon’s answer
Wow! That is a lot of information to absorb, Are you representing yourself? Or do you have an agent of your own? You need to talk to them, and if you are representing yourself, you need legal counsel, see the thing in a forum like this is we cannot see the contract, the addendums etc we cannot advice you on legal matters. We can however refer you to legal counsel. legalhelpers.com might be a good place to start...to many unknowns in this questions you need additional assistance that noone on here is going to be able to provide, contact your realtor, their broker and when all else fails legal counsel.
Good luck sorry your home buying process is less than exciting
0 votes Thank Flag Link Mon May 10, 2010
Personally, I recommend that inspections and other buyer expenses do not take place until after the short sale approval is given to me in writing when I am the buyer's agent, for just this reason.
The only problem with this is that the seller needs to submit an accepted offer,signed by both seller and buyer and now a contract, to the bank. It will be subject to bank approval. The bank approval is a contingency to the contract.

Since the seller has accepted an offer, now a contract, then the buyer needs to meet the contingencies and deadlines stated in the contract. Inspections, mortgage contingency and any other contigencies need to be performed or met by the dates and deadlines per the contract. If not met, then the contract could be considered in default and any back up offer that has met it's contigencies and deadlines could move into first position.

Both seller and buyer would need to agree to an extension for inspections and contigencies if waiting for bank approval before doing any inspections.
1 vote Thank Flag Link Tue May 11, 2010
Listing agents are not parties to purchase agreements. They cannot accept purchase agreements, counter or do anything else other than convey the sellers' instructions.

Personally, I recommend that inspections and other buyer expenses do not take place until after the short sale approval is given to me in writing when I am the buyer's agent, for just this reason.

Ask your agent to get you more information about where this short sale stands, how it is being processed and what the story is with the middle man.

Short sales are often complicated. I tell both buyers and sellers to plan on about 6 months from the initial acceptance of the offer (by the seller NOT the listing agent). For people who want a quick move or a guaranteed time frame, a short sale is not the answer.
1 vote Thank Flag Link Tue May 11, 2010
Maureen Fran…, Real Estate Pro in Birmingham, MI
Unfortunatlely it's the nature of the beast. This is the problem with short sales and foreclosures. They can take a long time, there can be other liens on the property that need to be satisfied or addressed and you can wait for months only to find out that it either is not approved or flat out rejected.

With short sales, the offer is with the seller not the bank. The seller can agree to anything, but it will be subject to bank approval. The listing agent is working for the seller and the seller is asking the bank to approve the sale. The listing agent is in contact with the bank, but only for information not working on their behalf. Doesn't really sound like the listing agent has done anything wrong here. They just relay what the band requires or counters on the offer. If the bank rejects or alters the offer, there isn't anything the listing agent can do.
1 vote Thank Flag Link Mon May 10, 2010
Understandable but as a listing agent, I don't want my seller waiting months for approval for the shortsale and then have the buyer do an inspection. What if the buyer walks after doing the inspection because the seller won't pay for repairs or whatever. Now the seller has wasted time and has to start over again. I'd rather have the buyer do their inspection in the beginning and should they walk get it back on the market asap.

Guess it all depends on what side you represent. ; )
0 votes Thank Flag Link Tue May 11, 2010

I include a clause that says all buyer contingency periods commence after all creditors have approved the short sale in writing and the seller has accepted the terms of their approval. No need for extensions then.
0 votes Thank Flag Link Tue May 11, 2010
Maureen Fran…, Real Estate Pro in Birmingham, MI
For the tax credit you still need to close by June 30th. Sounds like the listing agent is having trouble negotiating the liens on the property and has contracted with a professional negotiating company to try to get some assistance.

Since you only mention the listing agent I will assume you didn't get your own agent that would have asked all the pertinent questions like how many liens are on the property? If it had been more than two your agent would have directed you elsewhere and you wouldn't have spent all this time waiting and money on inspections prior to short sale approval.

You have a choice to make stick it out and wait for approval or withdraw your offer and move on to the next one. I also recommend you find an agent that will represent just your interests.
0 votes Thank Flag Link Tue May 11, 2010
Patrick is right on with what happens with a short sale. It takes months (usually) for the bank to process all the information given to them from the seller. It is only after that that they start talking about numbers. If it is Bank of America it can take forever. If this is indeed a short sale this is norm, sadly enough. Don't give up they do work out. Usually the agent is not calling the shots they are just a messenger. If you are working with an agent, did they disclose if this was a short sale or foreclosure and the process could take months and what the process was? I live in an area peppered with both and that is the first thing I go over with all my buyers. I wish you the best of luck and hope it works out soon.

Have a great day,

Nancy Doyle
0 votes Thank Flag Link Tue May 11, 2010
Sounds fishy.... there could be fraud going on. Some "middleman investors" attempt to buy a property and immediately flip close to market value to the "retail" buyer.

Is your contract signed by the Seller (per public records)? Are you buying it from an "investor" that already has a contract with the owner and is attempting to defraud the underlying lender by "hiding" your higher offer.

These vultures and their listing agents are getting investigated by the FBI so hopefully we will see fewer and fewer victims.

Ask your Realtor to dig deeper into what is going on. No reason for a 5-6 month delay unless they're attempting something fraudulent or they could be renting out the property and collecting rents.
0 votes Thank Flag Link Tue May 11, 2010
Of course this is a legal question and you should contact a lawyer. Do you have a buyer's agent?
0 votes Thank Flag Link Mon May 10, 2010
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