This should be the same attorney you're going to close with, as a package deal, he should review your offer and do the closing for you for somewhere between $500-1000, tops.
Instead of having to worry about all of the games being played (which you've outlined above), I've found that in my experience, when I use an attorney to MAKE THE OFFER, too, not just for closing, everything changes. The tone of the deal is on a higher professional level and all parties tread more carefully. Your attorney will find out whether or not the offer was even submitted, and if it was not, that's enough cause for an agent to lose his/her license by itself.
Don't get aggravated, get an attorney. They know the law. Banks normally do not give anything in writing for a turn down. It's bad business practice, BUT, try the offer with an attorney.
Scott Miller, Realty Associates, Boca Raton, FL
Look for better answers or move on to the next house.
Most likely if the agent is not communicating well with your agent, then they are not communicating with the bank effectively.
The owners made up stories about getting an appraisal and that the bank rejected the offer. We found out that it was all a hoax on their part. They got the extra time they wanted in their house. They are probably still going to lose it though.
I will never get pulled into a situation like that again.
Thank you for all the advice and information!
Sounds like you were played by the sellers, they probably tossed that offer to the lender, stalled the proceedings to buy time then dismissed you. Some owners are scum and are playing the system - and the system is no bargain either.
On the earnest money, if they are non responsive your agent's broker can send written notice to disburse it within a certain period of time back to you - have them explain the options.
If they're agents - make them a little miserable and contact the GA Real Estate Commission - http://www.grec.state.ga.us/
Now that appears to be particularly rude. Sorry to hear that.
I'm always amazed to see how some people behave.... but after a while we've all seen similar behavior.
I'm sure your broker can advise you on how best to proceed since they know all the details, but there is a resolution procedure that may help. If your broker holds the earnest money and is able to determine that you clearly deserve the earnest money back, he/she can inform the other broker and the seller of the intention to refund it to you. If they do not contest that action within a certain timeframe, your broker can proceed with the refund. Check with your broker about this possibility. If the listing broker holds the earnest money you can request the same procedure but they might be more inclined to side with the seller's case (if they bother to make one).
Good luck achieving a successful conclusion to this attempted transaction...... and with a more successful purchase next time.
I have found that these things usually lead to a better result down the road for the buyers. I'm sure you'll find a home that's an even better fit for you and you'll buy from a seller who deserves an earnest buyer like you.
If you decide to proceed with another short sale property you now know some of the many obstacles to those transactions. As another responder pointed out, the listing broker is required to present your offer to the seller, but there is no requirement that the seller follows through with a presentation to the existing lender. You also have no control over whether the seller presents all the other requirements for the seller to consider accepting less than what is owed on the property....things like their hardship letter and financial disclosures. You can sit for months with a contract accepted by a seller but a bank that will not consider the agreement because a depressed seller cannot attend to their paperwork. Then you have the broker price opinion that may show a higher value than your contract price as another obstacle. We haven't even discussed the possible existance of a second mortgage on the property.
My advice is to investigate the background work that the seller and listing agent have done before you enter into an agreement with the seller. If they have met all the bank requirements you will have eliminated a lot of the obstacles and it wiill come down to the price that the bank will accept.
Personally I would not spend the money to involve an attorney in the process since that is additional cash up front for his representation when you don't even know if you'll get the property. Since most banks want "as is" contracts in short sale situations that means you're spending money for the inspection up front already. It's my belief that it is much more important that you have a well trained agent on both sides of the transaction advising you and the seller about how to proceed.
Short sales are tricky for parties as the listing agents all do them differently and it can be frustrating. TYpically - the seller/owner of the property would sign and agree to a binding contract with the buyer CONTINGENT upon the bank's approval of the termsl. So it would seem if the sellers weren't happy with your offer - it would have never even been submitted to the bank for their approval.
Note on drive by appraisals - these are what put the housing market into trouble. A house can look terrific from the outside and be a diseaster inside. A few refi's will do driveby appraisals when there is a lot of equity but I do not know any lenders that would do one for purposes of loan underwriting or even to approve sales price. Banks hire 3rd parties to do BPO's (broker price opinions) but ususally those include onsite visits to the subject property. Lenders who do automated valuations can cause problems when their need not be problems.
Move on from these sellers. Know there are great homes out there being short saled and may be worth your time investment. You can always do an apprraisal on the front end so it can be included to the bank with the offer.
In a short sale, what should have happened is your offer should have been presented to the seller. You and the seller negotiate the price and terms, bind the contract with a BIG stipulation that states the purchase is subject to bank approval. Then the contract gets submitted to the bank, who will decide if they can accept the price and terms of the contract. They can approve it, decline it, or counter it. But first, the bank orders a BPO, or Broker Price Opinion from a third party agent, who will give the bank their opinion of market value. If this comes back significantly higher than the contract price, they may decide to reject it altogether rather than countering.
I hope this helps!
Better Homes & Gardens Real Estate Metro Brokers
Now Second, If all paperwork was filed incorrectly the bank would of just reject it anyway. Every bank has a system and if you don't follow it then it is rejected. However, you can follow the system perfectly and if the bank does not like it they can say no and reject as well. They have that choice. In fact they have 3 choices; no, yes, counter. Sounds like to me you put in an offer that was just not attractive enough. If and when the property finally forecloses you can go to the auction, or wait for it to be resisted if that ever happens. You could also resubmit another offer. Hope this helps. If it does consider choosing best answer for me.
By Georgia real estate law, all offers submitted to a listing agent by a buyer must be submitted to the client "in a timely manner". There is, however, no requirement for the seller or the listing broker to respond in writing or otherwise.
Personally, I always encourage my clients to at least counter offer (even if at full list price) instead of flatly denying an offer out of hand. However, with almost half of all real estate transactions being bank owned or short sales, many typical professional "courtesies" have given way to a more wild-west environment of slow and no responses from sellers or their agents.
Short sale buyers, in general, should be
1. Patient and willing to wait up to six or eight months before closing.
2. Willing to accept the house "as is" but with a right to inspect the house.
3. Pre-qualified for a mortgage and have all mortgage applications complete and approved (to the extent possible without a property identified).
4. Work with an experienced and qualified real estate agent who has successfully completed multiple short sales.
5. Have your real estate agent find out which banks will be approving the short sale. Lenders are VERY DIFFERENT in their approach to short sales. Some are easy to work with. SOme lenders are impossible to satisfy.
6. Have your real estate agent find out if the seller has made application for the short sale. To the extent possible, find out where they stand in the short sale process.
There are many more consdierations when purchasing a short sale.
On the listing side, when an offer is accepted by a seller and sent to the bank I get the seller's permission in writing to share correspondence from the bank's loss mitigator related to the offer. Before an offer is submitted I let the buyer's agent know this up front as well. This assures a buyer's agent and their client that a short sale is legitimate. In my mind this is part of protecting a buyer's best interest when dealing with short sale options on the open market.
Please see my blog with short sale advice and tips on how they work and how to get them approved
To remedy the problem, I coach my clients to make many offers on like type Short Sale or Forclosed properties until we get that all elusive lender acceptance addendum, which is the commitment from the bankers. Until you get that you have no deal, really. A sellers acceptance only starts the process and you could be overbid by another buyer almost anytime.... This is very tricky business.
You are lucky rec'd a response if bank rejected the offer. Almost 100% of time no rejection offer is sent listing agent.
Your buyers agent needs provide you "all the odd things take place" when working with short sale foreclosure. We do upfront prior to showing properties have our clients sign on paperwork therefore they understand exactly what takes place. Each item is initialed saves so much in confusion
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
I would cut my loses, and find another house, there's plenty to choose from.
Unfortunately, it is not required that they respond in writing. Typically, they tell the realtor which offer they accept and by default we have to call the other realtors and notify them that their client's offer did not get accepted. If you need more information or if you need to find another home, feel free to contact me so that I can put you in contact with a realtor in your area. Re/Max agents are agressive negotiators and transactional experts like me. If you are in Georgia, I can represent you. If not, one of my Re/Max affiliates in your area will work directly with you. Either way, I wish you the best in your efforts to purchase your dream home. Sonya Jones, Licensed 20 years http://www.SonyaJonesSellsHomes.com email@example.com 678.755.6590 Direct
There is a question of a second mortgage though. I know this, because the owner mentioned it to me when I viewed the property. She reassured me that the second mortgage would not be an obstacle. Well, that wasn't the truth and now they have filed bankruptcy.
I think we were used by the owners to stop their immediate foreclosure. There are other issues going on with them and they needed more time in that house. They certainly have time now! I should have listened to my instincts. Something was telling me this, but I didn't trust myself. That will never happen again!
We will stay as far away from short sales as possible!!!!!!
To determine if it's "legal" and your "rights" and if you have some recourse against the property owners as you say they are licensed real estate agents (and are thus held to state standards), consult a real estate attorney. Real estate agents / brokers are not licensed to give legal advice...so I won't give any here.
As a licensed real estate broker, I can tell you that it's not unusual to not see a copy of a bank's rejection of a short sale offer. Short sales can be very frustrating to the buyer and buyers agent. If you want less frustration, there are plenty of bank owned properties and plain old seller-owned properties out there with great prices! Go buy a property from a seller who wants to sell it to you! Best of luck.
Don't be discouraged! Chalk it up as experience. It could have been worse, believe me. Now you know what to look out for next time. Move on to the next deal and pretty soon you'll be a pro! It just takes practice.
p.s. thanks for Besting me.
We are really disappointed and have a nasty taste in our mouths now!
There is no law that says a seller or bank has to give you a rejection in writing.
In short sales it is not uncommon for the bank to take weeks to respond even verbally, and also common for the bank to want more than the asking price.
Just move on and avoid short sales if you don't want to deal with this type of thing would be my advice.
The involvement of an attorney will not get them more 'focused attention' from the bank. I didn't write that. I wrote that it should get them more transparency on getting their offer PRESENTED in the first place. They are suspicious that their offer was not even presented! Having an attorney represent you will definitely change that. The attorney could and should ask for copies of the offer being made, proof that it was made. A buyer will be ignored, as usual. Having an attorney represent you changes everything. Been there, done that.
Scott Miller, Realty Associates, Boca Raton, FL
Harry Norman, REALTORS
I have other questions, though. You say the owners are real estate agents and the bank rejected the offer. This doesn't make sense to me.
Good Luck to you,
Atlanta Housing Source at
Solid Source Realty, Inc.
Home Buyers & Sellers - http://www.AtlantaHousingSource.com
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