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Olympia, Home Buyer in Los Angeles, CA

When to contact the broker? Short Sale Confusion

Asked by Olympia, Los Angeles, CA Tue Apr 3, 2012

I've got an offer on a short sale - it's been signed and accepted by the owner. The owner is applying for the HAFA program. We were told that our offer would be submitted last week. When we pressed the agent (we have a dual agent) about when our offer would be submitted he said that there was an offer submitted with the seller's application package. The agent has said that when he hears back from the bank he will counter all (5) offers with the bank's terms. It is my understanding that it doesn't necessarily work that way but I've also read that short sales can be a bit of a free for all.

We consulted with a lawyer friend who thinks our offer should have been submitted to the bank (the agent states that he can't submit an offer without a task in the equator system). The lawyer suggests that we contact the broker and try to have the broker review our file, submit our offer and take over as our agent and/or take the listing away from the current agent.

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If one offer has been submitted to the bank, the listing agent does NOT have to submit subsequent back up offers to the bank as well. He can Hold onto them as back ups & if something happens to the 1st buyer & they back out, then he can entertain the back ups & submit another one.

The listing agent of a short sale does not have a fiduciary duty to the bank, the bank is not the seller.

Put yourself in accepted offer #1's shoes. Do you want the listing agent submitting offers over yours? Likely not.

Some agents submit all offers to the bank, some don't. Personally I find that my buyer retention rate is much higher when I am loyal to one buyer who's offer is accepted & submitted to the lien holder(s) & that buyer is more loyal to myself & the seller in the more lengthy process that is the short sale transaction.

I don't look back on this same Trulia thread for answers posted after mine.

EmilyKnell1@yahoo.com
562-430-3053 c
Realtor Since 1996
Main Street Realtors
0 votes Thank Flag Link Wed Apr 4, 2012
You always have the right to speak to the broker. One thing I know about Equator is they only take one offer at a time.
The fishy part for me is they usually want a full & completed contract. Which means the seller had to of signed off on the first one and has to see that offer through before accepting another.
Example if the bank counters on terms and price the first buyer has the right to counter them back before the seller could go to any other buyers if they signed off on the first offer.
The only way I see the agent being able to counter everyone is if he sent a multiple counter in the beginning so the seller could sign off on one offer without completely accepting it.
Then when the bank counter terms the agent can counter everyone.
This way can be risky because most Equator lien holder users only like working with one buyer and are buyer specific.
The more I think about it the more I would go to the broker.
0 votes Thank Flag Link Wed Apr 4, 2012
Olympia,
First, it's customary for an agent to sit down with the seller, review all offers, and select one to submit to the bank. Once the bank counters, which usually takes a month to several months, depending on their response & processing time. Countering all 5 offers after the bank approves is not customary. Usually the buyer with the offer submitted has the first option to approve and open escrow.
Depending on who the seller's bank is, yes, it may be awhile before the offer can be submitted in the equator system. My most recent short sale listing took a month before we could submit.
0 votes Thank Flag Link Wed Apr 4, 2012
Short sales can be a frustrating process as can dual agency. I don't recommend dual agency unless it's a very cut and dry situation.

Only one offer may be submitted at a time and it can only be renegotiated if the bank wants different terms or that buyer walks away. The bank sometimes counters at a price that is nowhere near the list price, so keep that in mind. I'd suggest you continue to look at other property while this plays out and find a great agent whom you trust who can represent you in finding the right property.
0 votes Thank Flag Link Tue Apr 3, 2012
Thanks, Rebecca, that's what I had thought about Equator too but from what I've read here many agents play things differently.

The lawyer insisted that our offer should be taken to the bank but I don't necessarily think that's the way it works either.

Essentially I don't want to horribly anger the agent but I don't feel he's working for me. The lawyer suggested that the broker really stands to lose or gain the most with us being in a dual agent scenario so that contacting the broker would be a good move. I don't like the idea of going over someone's head but I don't know how to motivate the agent to help us either.

Anyway, I'm frustrated and trying to learn. I appreciate your help!
0 votes Thank Flag Link Tue Apr 3, 2012
You can't take the listing away from the agent but you can certainly ask his/her Broker to intervene.

Equator does not allow things to be submitted without asking for them, but it usually starts with the offer, so there was probably another offer submitted and they want to keep you around in case you are willing to come up to what the bank wants if it's over that offer.
0 votes Thank Flag Link Tue Apr 3, 2012
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