Sophia, Short sales can be very hard unless you are a patient person. And, sometimes they may not even work out which is a bummer when you have waited so long. It has been my experience to open escrow after the seller has accepted your offer. Then, it is just a waiting game with the lender. Unfortunately, lenders right now are bogged down with many short sales and it can be such a frustrating process. Even with the seller accepting your offer, the bank does not have to. They can just let it go to foreclosure. So, don't be surprised if it does not work out. I would ask my agent all the time to give me an update at least once a week. The other offers are in back up, so if you decide to cancel, someone else can step up if they want to. I would advise to make sure there was a short sale addendum signed by you with the offer so you do not have to do all your inspections and remove contingencies because that would be unfair to you in case the lender did not accept your offer. Good luck!

Fri Apr 25 2008, 13:01

It is a binding contract, except as long as the listing agent put subject to bank approval (which means the bank will say yes or know, how much and who) , that is the out for the seller. If the listing agent didn't do that, then the question would be can the seller bring money to the table to close the deal. You need to be talking to your agent (they actually I believe should have explained all of this when you wrote the offer).

My experience as a listing agent is that I want the sell to go through quickly and easily with the most net to my seller. Of the agents that I work with, they would never try to hold on to a property to “get” a buyer for themselves. In fact representing both buyer and seller at the same time is very hard. Because now I add my fiduciary duty to the buyer which is to get the property that they want for the least amount that I can get if for them. (See the problem).

In the case of the short sale since we are really working with the banks for approval not the client and since many of the banks reduce our commissions if we are representing both the buyer and the seller to the same amount that we would make if we represented only the seller, there is no advantage. Unfortunately the banks do not get back to us as we would hope.

There is no reason that the listing agent can’t let your agent know if you have the best offer, however some of them won’t because they think they cant. The fiduciary duty of the listing agent is to get the most for the property (not the most for them), so letting the listing agent know that you are very interested in the property and that you would like to insure that you have the opportunity to offer more if there are higher offers is something that your agent can do. This isn't about you being able to lock up the property with the best deal, this is about the bank forgiving the least amount of money that they can and then giving permission to the seller to be able to sell the property with out paying them back all that is owed to them. Remember that your ability to purchase the property (the type of loan and the amount that you are putting down) can also weigh heavily on weather or not your offer goes forward or is the best offer, the listing agent needs to feel confident that you can close in a timely manner so that the property doesn't go to sale, so that everyone can win.

Good Luck, make decisions with information!
Diana 909-945-5763

Mon Apr 21 2008, 12:49

Thank you Diana and Amy for your excellent advices. I have a feeling that this agent that I am working with does not know much about short sales, as she thinks that the seller accepting the offer is a binding contract. It seems to me that the listing agent would rather not share the commission and is waiting for a buyer with possibly similar qualification as me, but who would work with the listing agent directly. Is there anything that can be done about this situation, or is it a situation where in the future, I should make sure that I only work wiht the listing agent?
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Athough as a listing agent I like it a lot when the buyer comes to me, you will get no better deal, or better response from me using a selling/buyers agent. As Amy said, my job is to sell the house and it looks better for my "record" to sell it quicker with another agent than hang onto it for a year so I might be able to sell it myself. As for your other comments about "feeling" your agent has no experience with short sales (most don't, we haven't been doing them that long) or "thinking" .....rest assured, probably 80% of my buyers and sellers "think" "feel" "suspect" something. The buying and selling process is an unknown to a lot of people so they think anytime something is delayed a day, someone asks for a little more, or no one hears anything immediately that there is something nefarious going on with the other side. 9 out of 10 times there isn't.

Mon Apr 21 2008, 05:11

Dont be so quick to discredit your realtor. She is only being fed her info from the listing agent. Ask her to talk to the listing agent and find out if there are other offers they are considering. She should also ask to speak to the bank directly, if the listing agent is willing to give the contact info. I was in constant communication with the bank for my buyer...and the deal went through.

I doubt the listing agent is waiting for her own buyer...half a deal is better than no deal. The goal is to get the house sold, not to see how much money you can make. You dont have to work only with listing agents and it does not ensure you a better or worse deal.

Why do you feel there will be other offers? Did you submit a low offer? If you really like it, then your offer should say you like it.

Good Luck and let me know how you make out.

Mon Apr 21 2008, 03:22

Thank you Diana and Amy for your excellent advices. I have a feeling that this agent that I am working with does not know much about short sales, as she thinks that the seller accepting the offer is a binding contract. It seems to me that the listing agent would rather not share the commission and is waiting for a buyer with possibly similar qualification as me, but who would work with the listing agent directly. Is there anything that can be done about this situation, or is it a situation where in the future, I should make sure that I only work wiht the listing agent? I really like this property...and I feel that there will be other offers that I will be competing with. Thank you in advance for your advice.

Sun Apr 20 2008, 20:55

Unfortunately the bank has the final say so, how it is handled by the listing agent can be done differently depending on how the offer and counter was worded. If the agent has identified that they have a right to accept offers in the counter and leave it active is one way. If not then it would be that they take back up offers, but depending on the way the bank works the bank could identify the back up offer as the accepted offer and not even give you a chance to match the better offer. Short sales are very difficult and yes patients is the name of the game, but even then sometimes they work and most of the time they don’t. Hopefully your agent has checked to see how much is owed and if there is a first and a second (those are harder to get through) and lastly that they made sure you made an offer within 10% of what it should appraise for.

As far as putting the money in escrow, again it is a case by case call. Did you use the SSA and did it say that the time period is based on the lenders written approval or not. How was the offer written determines when you would be putting it in escrow. The problem with putting money in escrow and it not going through is usually only a problem if you can’t
Goodluck and make decisions with information,
Diana 909-945-5763

Sun Apr 20 2008, 17:18

The seller has NO say so in accepting your offer. That is up to the bank.....and the bank is going to take the highest offer with the best financing....CASH takes it usually.

You should have the escrow with your agent. Give the bank as much info as possible. A firm commitment from your lender trumps a pre-approval letter. Be flexible. Offer to close whenever they want you to...the sooner the better.

Word of caution......has the title agent done her searches? We found out Friday night at 930pm for a closing Monday at 10 that property taxes were not paid. We still closed it, but not til that next Friday waiting for the bank to decide to pay the taxes for the seller.

Good Luck! Patience is a virtue, but if your agent can talk directly to the bank (remember you get more flies with honey) you will be more informed and up to date....just don't become a pest.

Sun Apr 20 2008, 15:21