Sherryusg, Home Buyer in Stevenson Ranch, CA

WE put an offer on a short sale. The realtor came back on a Saturday and gave us an hour to get all paperwork together for our best and final offer.

Asked by Sherryusg, Stevenson Ranch, CA Sun Sep 18, 2011

We offered 408,000 as our best offer. We just found out the house sold for 397,000. Doesnt the realtor have an ethical obligation to present the highest offer to the bank, and can we sue?

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I am curious how you heard that the accepted offer was $397,000 since that should be protected information until the closing. The seller's realtor does have a responsibility to provide all offers to the seller and often the bank will want to see all offers as well. However, there are a lot of conditions which impact an offer beyond the price. Perhaps the winning offer was cash and yours was contingent upon a mortgage. Perhaps the other offer had no other contingencies and yours did (like an inspection, etc). When in a short sale situation, the seller will be looking for the deal most likely to close and also fo the buyer most likely to be able to wait until the seller's lender approves the contract. That can be many months down the road. Keep your eye on this listing however. Sometimes these deals don't close and the listing returns to the market.
3 votes Thank Flag Link Wed Sep 21, 2011
Sherry,

Many times I've had the highest offer, but not the best offer.....meaning, I may have offered the $408k figure as an example but with a 80% loan to value ratio, while the competition offered $397k cash. I don't know if that was your situation, but perhaps your offer was submitted and just didn't get excepted. I've seen offers with a loan get trumped by cash offers that were $80k lower. The lending world is scary right now and cash is king in a major way. If you were comparing apples to apples then I would be a little upset as well, but the seller still has the right to accept any offer they wish. It would be nice to know who represented the winning buyer (double-ended transaction?) and what were the terms of their deal.
2 votes Thank Flag Link Thu Sep 22, 2011
As an agent who has had buyers in that same situation as you have found yourself, I truly understand the frustration and complete disappointment. I think that many of the answers by the agents here express great points. Since I am an attorney, too, I think that you would be better off not suing and just continue loooking for another great home. Undoubtedly there will be an even better on in the future for you without the drama and stress. Yes, you can sue, it just won't likely accomplish a whole lot other than to accumulate attorneys fees and lost sleep and other home purchase opportunities that will be missed.
2 votes Thank Flag Link Wed Sep 21, 2011
http://map.levypa.com/map.aspx?parcelid=1705000000

Waterfront Condo in Cedar Key, Florida was foreclosed on by the bank with a mortgage in excess of $200,000.

Bank auctioned home at $120,000 with reserve. Bidding got to $86,000 cash and the bank turned it down. Went to auction a 2nd time and the bidding was less than $86,000 cash. The bank turned it down AGAIN. Went to auction a 3rd time and the bank accepted a before auction bid of $57,800.

Moral? None when dealing with a bank, just keep trying. Sign a buyer representative contract with your agent for the next bank property you try to buy. Then talk to your agent about YOU calling and bugging the banks representative. All the agents, brokers and YOU want the purchase to succeed. The banks hourly paid clerks could care less. Bug them and they might push for you just to get rid of you and a property.
2 votes Thank Flag Link Mon Sep 19, 2011
Short Sale is a buzz topic for many buyers, the idea being that Short Sale = Good Deal for the buyer. Not necessarily the case considering the amount of time, effort and frustration it can take to close one. Maybe on the next property you choose one that isn’t a SS and the bank isn’t a party to the decision making process. That doesn’t mean you can’t find a good deal, just not a buzzy one.
1 vote Thank Flag Link Thu Sep 22, 2011
I'm a little bit confused. Unless the home has closed escrow and the short sale has been approved by the lender, than the house did not yet sell. Short sale approval letters contain the buyers' names, so it's unlikely that all this has been accomplished since Saturday. Now, does the listing agent have an ethical obligation to present the highest offer to the bank? That's an interesting question. The listing agent has a fiduciary obligation to the seller, and it is the seller who decides. The bank merely ratifies the contract. But it does seem a little bit irregular to not accept the highest offer.

Can you sue? I'm not an attorney, so take this for what it is worth: I don't think so. Say, for example, I list my home for ten dollars. I receive two offers: one for ten dollars that can close tomorrow (I really want to close tomorrow), and another for eleven dollars but they want to close next week. Since I want my money tomorrow, I select the offer for ten dollars. Can the individual who offered eleven sue? I guess he could hire an attorney, but the better question is: would he have a case?
1 vote Thank Flag Link Mon Sep 19, 2011
The Realtor or Listing agent does not have an obligation to the bank. The bank is not their client, the seller is.

The offer for $397K may have had stronger financing than your $408K offer.

If your Realtor came to you yesterday to ask you for a "final & best" the property has not "sold" yet, it just sounds like the highest & BEST was the $397K offer.

As you shop around for another home, you should let the listing agent know that you'd like to keep your offer ON THE TABLE as a "Back up".

If you need any further assistance please don't hesitate to email me directly as I don't look back on this same thread for answers posted after mine.

EmilyKnell1@yahoo.com
Main Street Realtors
Realtor Since 1996
562-430-3053 c
1 vote Thank Flag Link Sun Sep 18, 2011
The gray area related to your question and a short sale option, as I've heard from other Agents/Relators comment, is the Seller (owner of property) obligated to present all offers to the bank? Or, does the seller decide of all the offers received which one gets submitted to the bank?

Can anyone add credible information to these questions. Thanks!
0 votes Thank Flag Link Mon Oct 3, 2011
Sherry,
Lots of great advise and insight provided by so many contributors to your question.
In the Wild, Wild, West of real estate, often referred to as short sales, anything goes!

What has not be stated is this is only the first 'price' negotiation that will take place.At some date in the future the bank will counter with what they believe to be the price best suited for their needs. They could come back with a fair market value which could be 450 or 500K. Having a buyer on board who can go higher if the negotiator is unsuccessful in getting the bank to 'see the light' has a lot to do with 'best offer.'

Best of success in finding your new home.
0 votes Thank Flag Link Mon Oct 3, 2011
The BEST offe ris not always the highest offer. the bets offer is one without any contingincies, no home inspection and not contingent on getting a mortgage, as well a closing within 30 days. As far as ethical obligation, the listing agent doesnt work for the bank, they work for the seller. If teh agent recomended a higher orice but it falls through and the house is foreclosed, then they have violated their duty to the seller. Sorry to say you may have no basis to sue if you had any continginices in your offer, if you were not paying cash and did not include a closing date less than 30 days.

http://www.trulia.com/blog/scott_godzyk/2011/08/the_basic_pr…


Please see my blog how a short sale works,
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Oct 3, 2011
Sherryusg -

The "best offer" is what is "best" for the bank, not you. There are numerous terms besides price. It is our legal obligation to present all offers but it is up to the seller(s) to accept the one that they want. The other offer could have been a cash deal. Also, it could have been a rescue company that has their own team of negotiators. Meaning, if there are multiple leans, say a 2nd lien for $50,000 that the 1st bank would have to pay off, but the other buyer had attorney's representing them they could find a way to remove that lien effectively making their offer $50,000 higher. It's complicated.

Cathy Bureau
Green Home Realty

Certified Short Sale & Foreclosure specialist
0 votes Thank Flag Link Mon Oct 3, 2011
Jim's spot on. There are lot's of good deals out there. I'd be saying.............................NEXT!!
0 votes Thank Flag Link Thu Sep 22, 2011
When there are multiple offers that means all offers MUST be presented.... the seller has the right to pick the highest and best. The highest is not always the best offer.... terms and conditions come into play as well as cash offers. As a realtor I see this happen a lot.
0 votes Thank Flag Link Thu Sep 22, 2011
As usual Melissa. That's why I recommend you. You just make too much sense.
0 votes Thank Flag Link Mon Sep 19, 2011
Great answer Dean..............................!!
0 votes Thank Flag Link Mon Sep 19, 2011
Bottom line? Anything goes with a SS. It's a very frustrating and time consuming experience to say the least. Not everyone is cut out of that cloth. Sometimes it's just as easy to just shop for the best straight forward deal you can get. This comes from a distressed property specialist. Good luck.
0 votes Thank Flag Link Mon Sep 19, 2011
Purchasing a home in Stevenson Ranch I can understand is frustrating right now because the inventory is low.

As others have mentioned sometimes the "Highest Offer" doesn't equal the "Best" offer. Maybe the other offer had more money down, higher deposit, shorter contingency time frames, the buyer was willing to wait longer for a response, maybe it was all cash, maybe there is back HOA dues the buyer was willing to pay.

Many things are taken in consideration when choosing the best offer for the seller to sign off on and have it submitted to the bank for approval. Have your agent reach out and let them know you would like to be "back up" if you really like the house.

Many times the first buyer walks and you may be able to get the house for the lower price. Good Luck.
Web Reference: http://www.Laura4homes.com
0 votes Thank Flag Link Mon Sep 19, 2011
While your offer MAY have been higher, it might not have been better. It is up to the seller, with the help of the seller's agent, to determine which offer to accept and submit to the bank. There are a lot of factors besides price that go into determining which offer to go with. It's also possible that the other offer was higher, but then reduced due to inspection or appraisal that occurred during the contract period.
0 votes Thank Flag Link Sun Sep 18, 2011
Buying a home in Clovis can be a very frustrating experience. My wife and I have been searching for 13 months. We didn't want to settle for a cookie cutter, which is about 80 percent of the homes that come to market. When a good home comes to the market people can get a little nutty on what they're willing to pay. We've found that dealing with the listing agent specifically is usually the most advantageous route. Unfortunately ethics in real estate here in Clovis don't go hand in hand. You really are looking for a needle in a haystack here. A good home that's not overpriced that can be altered to suit your taste without being upside down after improvements. It's really a cash game and if you don't have the cash.....much like monopoly. The banks, investors and realtors have made this market an inside game.
Having said all those bad things....the area and the people are very welcoming and fantastic. Dan Mata with Century 21 is the Best Realtor we've met. And we ran through some very bad ones. Best of luck and patience.
0 votes Thank Flag Link Sun Sep 18, 2011
Not know all the details, the best offer is not always the highest offer, the best offer is that offer that has the highest chance of closing and also in the price range of the property.

Factors affecting the offer are financing, down payments, anything else that may complicate the process.

I understand your frustration, sometimes things just don't make sense on the surface, that'w why you want an agent representing you that will explain the process and help you package your offer to make it the best possible.

Fred
(661) 362-6775
0 votes Thank Flag Link Sun Sep 18, 2011
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