I have been negotiating short sales since 2004 and never heard of this. The contract to sell the home is between the buyer and seller. The only part the bank takes is to determine if they will take the discounted payoff offered by the contract. They are not a party to the contract itself.
My Loss Mitigation contact have told me that if more than one offer is submitted, the file basically goes to the "round file". The banks are not in the business of telling a seller which offer to take. There is too much liability in doing this. Also, the banks will not review a purchase agreement that is not signed by all parties. And if the seller signed more than one contract, then they have just agreed to sell ONE house THREE times. I think this is problematic.
You should have your agent call the listing agent and find out (1) why they submitted more than one offer; (2) if the seller signed all three offers; and (3) how many shorts sales they have successfully closed using this ludicrous method. The answers you get may give you reason to pause. Of course, if you want to know your legal position in this offer, you need to contact an attorney.
Hope this helps and Dare to Dream.
Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
Here's what happened in a recent transaction negotiation I was involved in, representing a highly qualified buyer:
1. Property is listed and disclosed as a short sale.
2. My client writes a full price offer. There are 5 other offers submitted on the listing. I learn from the listing agent that this is a HAFA pre-approved short sale.
3. HAFA lender asks listing agent to send over their preferred offer (which was ours) PLUS a grid showing all offers received including price offered, terms, and financing.
4. Final answer of bank approval is promised in 14 days or less.
5. Listing agent calls me on day 7 and states that lender wants us to raise our offer $20,000 or they will accept another submitted offer that was $20,000 higher than ours.
6. My client cannot financially go higher in his offer.
7. Lender ends negotiation with us and accepts the other offer that was higher, based upon the grid information they had previously requested.
I suggest that all buyers writing offers on short sales now ask if the property is a HAFA pre-approval property because clearly the banks are actively negotiating in these deals and only want the highest price (my buyer had a larger downpayment and a much higher FICO score and the lender still chose the higher price).
Hope this helps.
Keller Williams Realty
Los Angeles, CA
Key Solutions Real Estate Group
The second thing they are looking for is the strength of the Buyer. What are they presenting the bank with...do they have funds in reserve to make the down payment, time of the job, source of income, type of loan. If the Buyer is presenting with a conventional loan with a higher down payment, of lets say 20%, the bank will look at that first over someone submitting an offer with a FHA loan or 10% down payment. They look at the overall picture.
Unfortunately, there is no estimate of how long this will take. Hang in there if you really want this house. Some of the other Buyers may fall out due to the length of time they have to wait...they may choose another property. Banks right now are inundated and back logged with short sales and do not have the man power to handle them. So...if this is your dream property...hang in there!
All the best,
Prudential California Realty
It has a notice of default, the one and only lender is BofA, and our offer is the seller's choice, and she submitted two others as back-up...according to the listing agent. We haven't received the seller's signature, nor has she requested our info (like SSN) for the equator system. There's a language barrier and we can't find out much from the listing agent. She does not want our agents to call her until she updates them. We don't know if it's HAFA.
Our agents think this lady doesn't have much experience (or at all) in short sale, but they can't bug her or ask her too much. Our agents feel like if we show any doubts in her (the listing agent) skills/knowledge, she will dump us from the deal. but we are hoping that the equator system will guide her through the process so she can't screw us (or her client).
But since we love the house and don't mind the wait, we decided to sit and wait - until we find out or we find another home that we like. Thank you all for your input!
Good Luck !
Nextage Capital Advisors
1521 Wilshire Blvd
Los Angeles, CA 90017
Angel J. Hernandez
Prudential California Realty
This is a case of the agent making the day harder. Typically the first offer is submitted to the bank (wether it is $1 or $1,000,000). Then the home is still active on the market to pull in back up offers. When the bank is ready to review the sale they look at ALL OFFERS. Being the first does not mean you are runner up. In regard to the seller only deciding to submit the top three offers- he had no right even though the bank would probably have dismissed them. Each bank works differently but it all comes down to the most money with them! Your credit score, down payment, etc doesn't matter when at the end of the day the highest offer will be accepted. And sometimes the highest offer may still not be good enough and the bank may still require some more money. Don't forget that the bank is deducting the comissions, attorney fees, and all other fees right form the top of their "acceptable amount" and a measely several hundred dollars almost burst the bubble with a short sale I did several years ago.
Find out if this is a HAFA approved short sale before you assume that it is. It has been my experience that very few HAFA short sales get approved. Ask your agent to find out more. It could just be that the agent representing the seller is going about things in a manner that will not lead to a successful short sale. If it is HAFA approved, then the sale could (should) happen - you just have to wait to find out what they come back with.
Best of luck and remember to bring patience to the short sale process.
Just like a deed in lieu of foreclosure, the owner of record has the option to give up this right of ownership and empower the bank to make decisions prior to foreclosure, however if this is the advice of the listing broker they are not advising their clients wisely and IMHO are breaching their fiduciary duty.
If the seller does not give up this authority to the bank, no lender has the ability to enter a contract with any buyer on a property they don't own.
If you'd like to read more of my opinion on this you can review it here:
Please keep us posted on how this turns out and who the lender is - thanks.
Allan S. Glass
ASG Real Estate Inc. ®
149 S. Barrington Ave, Suite #660
Los Angeles . CA 90049
Direct: 213.973.8637 (213.97.FUNDS)
E: firstname.lastname@example.org http://www.asgreinc.com
CA License: 01154002
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