Home Buying in 10536>Question Details

Rjrr, Home Buyer in 10536

Short Sale. Realtor asked for highest & best,

Asked by Rjrr, 10536 Thu Dec 16, 2010

There were multiple bids, we were the highest (all cash no conting.). Paperwork went to our lawyer, this was 12pm today. she told other bidders our bid and they made another offer. at 3pm today we got a call that there was a higher bid with contig..Are they able to accept another offer after ours was accepted as "Highest and best" and is the Realtor able to tell other bidders what accepted bid is

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It's unfortunate, but legal as to what happened. Until contracts are signed the owner can do whatever they like. The listing agent has a fiduciary duty to the homeowner to present any and all offers. When you are dealing with a short seller it's a different situation then a traditional sale. The more evidence they can present to the bank showing they are getting top dollar for the home, the more likely the bank will accept the offer. I think there is certainly some risk depending on what the contingencies are on the higher offer.

When dealing with a traditional sale a homeowner can also accept a higher offer even after it went to a "highest and best" situation. What I've experienced is that many homeowners will stick with the original offer even if a higher offer comes in. This is not to say that if an offer came in that was way above the other offer an owner might not change his mind. The problem they could encounter is if the higher buyer is getting a mortgage the house might not appraise for the higher price. I frequently recommend to a seller to stick with the original offer. This is especially true if the original buyer is paying cash and I suspect the second offer may not go through. They could end up with no buyer.

Donald A. Mituzas
Licensed Associate Broker
don@nyhomeseller.com
845-222-0114
Web Reference: http://www.nyhomeseller.com
1 vote Thank Flag Link Fri Jan 7, 2011
Hey RJRR - I am curious what happened? id you get the home/short sale? This was truly a situation where having the right professionals around you - the realtor and the attorney make a difference. I am sure it was stressful nonetheless! Regrets:(
0 votes Thank Flag Link Tue Feb 4, 2014
Unless a contract is signed, highest and best doesnt mean anything...it just means, you're the highest and best at the moment.
0 votes Thank Flag Link Fri Dec 17, 2010
Unless an executed contract--signed by all parties--is in existance and deposit money was exchanged, highest and best offer does not guarantee anyone a sale will take place--again because no executed contract exists--and no, the agent is not allowed to tell any offer amounts, unless the owner wants/allows such information be made public. You could ask that your offer remain as a back up offer, should the accepted deal fall apart.
0 votes Thank Flag Link Fri Dec 17, 2010
Hi, Unfortunately "Highest and Best" doesn't really mean much. Some agents and sellers stick to this but by law we are supposed to present all offers until closing unless otherwise specified in writing by the seller. Just know that the seller in a shortsale accepts the offer but the bank has the final say. There are some banks preapproving shortsales so the seller will have an idea of what they will accept in advance. Also know that until contracts are fully executed by buyer and seller in New York, nothing is solid.

Sincerely,

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
914.406.9023
0 votes Thank Flag Link Fri Dec 17, 2010
Indeed that can be rather upsetting but what you need to know is that once an offer has been made and accepted it is still being shown to other interested parties until the contracts are signed, sealed and delivered! At least you got a call to tell you that that there was a higher bid and the reason for that is to give you an opportunity to up your offer if you wish. No, the real estate broker should never share what the other offers are.
Hope that helps.

Jackie
0 votes Thank Flag Link Fri Dec 17, 2010
FYI - Westchester County Sellers do not sign offers, nor do the agents write contracts. The process of getting the contracts signed is different here than from NH. Attorneys are involved every step of the way and the deal is not binding until contracts are fully executed with copies returned to the Buyer's attorney's office.
0 votes Thank Flag Link Fri Dec 17, 2010
The listing agent works for teh seller and can disclose offers to other buyers if the seller has authorized it. they fact that people forget , that even in a short sale, the contract is between the buyer and the seller. It is just contingent upon the sellers bank accepting the price and allowing the seller to pay off less. Sellers should not be signing more than 1 offer as they would be on the hook to sell the 1 house to several people. The short sale addendum protects the buyer and the seller by outling the terms of the bank accepting or not accepting this price. It is common for a listing agent to ask for highest and best offers if there are more than 1 offer. They should be doing so on a level playing field, they either have to tell every buyer the bids or should not discuss price at all. They should not be informing 1 buyer of price and not the others.

Please see my blog for tips and advice when buying a short sale.
0 votes Thank Flag Link Fri Dec 17, 2010
In a Short Sale transaction, the initial listing price of the house will sometimes be set artificially low to encourage a multiple bid situation. The bank is ultimately the deciding factor in a short sale offer - even after a long and painful waiting period the bank can ultimately come back and say they want more $ anyway. From your account of the bidding process, as long as the Realtor disclosed the same information to all parties, it was her obligation to her Seller (and the Seller's bank) to present all offers, even though your offer had been accepted in a 'highest & best' situation. At that point, however, you should have been given an opportunity to increase/match that offer. While your 'all cash/no contingency' offer is appealing in a traditional sale, the price is usually the deciding factor in a short sale since the bank wants the highest amount of return and sometimes requires that the buyer use their bank for a new mortgage (thus, getting a new customer). Most short sales are sold 'as is' meaning that any inspection you did was for informational purposes anyway (except environmental issues).

My questions at this point would be - did your Realtor ensure that you were given a fair opportunity to stay in the bidding process? - Do you know which bank holds the mortgage/what the mortgage amount is? We are very fortunate to have access to our Title Company and are able to have that information for our clients if it is not accessible through the Seller. - Is there still opportunity to re-present your offer (if contracts have not been signed you could still be in the game)?

Though it is always aggravating to lose out on a house do not let this sour you on the process. Here's hoping you get another shot at the house...or that another great one comes along for you in the Spring market! Wishing you a very happy holidays season and may 2011 find you in your new home!

Hope Mazzola
Westchester Real Estate -- You've Gotta Have Hope!
Web Reference: http://www.hopemazzola.com
0 votes Thank Flag Link Fri Dec 17, 2010
In New York State until contracts are signed by both buyer and seller there is no deal really...only a meeting of the minds. The broker should not be telling anyone what the accepted offer amount is even if the seller gives their permission..I generally explain all possible consequences to my sellers and they in retrospect run it by their attorneys.I was involved in 10 short sale deals last year as a listing broker and all I can say its up to the brokers to help keep it together. Good luck.

Regards,

Anthony DeBellis
Associate Broker
William Raveis
95 Katonah Avenue
Katonah, NY 10536
914.618.1737
0 votes Thank Flag Link Thu Dec 16, 2010
Even though a "highest & best" situation may occur, a seller's agent must present all offers to their client (the seller) up until closing. A seller can accept another offer at any time, even after contracts are signed, although they may have to concede some cash to compensate the "jilted" buyer.

The listing agent can only tell other bidders what the accepted offer is if the seller gives permission. It's generally not in the seller's best interest to disclose the specific number.

Good luck with your bidding!
0 votes Thank Flag Link Thu Dec 16, 2010
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