Home Buying in 22193>Question Details

Susan, Home Buyer in Woodbridge, VA

short sales-If I am a second back up offer to a short sale does the bank see my offer?

Asked by Susan, Woodbridge, VA Thu Oct 9, 2008

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Altavision Real Estate’s answer
Under normal conditions we can consider the primary offer "the accepted offer"; in short sales is a different story. Whatever the Lender accepts is actually the primary offer. Listing clearly states so when the final acceptance of the price is conditional to Seller's Lender acceptance, which means; “you have a good chance, but, your luck can change". An agent working on the Sellers behalf will make sure all offers are presented to the Seller's Lender, and to the Seller's Lender it is irrelevant which offer the Seller accepted. With a first so called primary offer and two back-up offers, you may find yourself in a bidding war. If you make a back-up offer, do not spend the rest of your life waiting for the outcome. Make the time you are willing to wait specific. As the following questions: When was the primary presented and accepted by Seller? When was a negotiator assigned? How is the communication between negotiator and Listing Agent? Is it 1 mortgage or 2 mortgages that are in negotiation? Who are the lenders (easy to work with)? Is your price competitive? (Have the agent representing you do a market analysis to find out? How long has the house been in the market? What was the starting price and what changes in price the history of the property shows, and when? I know this is a lot, but, it can save you months of waiting for nothing. I have been doing real estate for 23 years and have seen good and bad times. Times are bad, and drastic measures have been implemented by many to get results. Good Luck!
0 votes Thank Flag Link Thu Sep 23, 2010
I have dealt with banks who have handled offers in a variety of different ways:

1) The bank reviewed all offers and asked for feedback from the LA (me) which offer was recommended to accept.

2) The bank negotiated each offer that was presented in order received. The bank countered to Offer #1, which was a lower price and had a sales contingency, while ignoring Offer #2 which was a cash offer at a higher price with no sale contingency. Figure that one out and tell me why banks are in trouble. Eventually, Offer #1 failed, and the bank moved to Offer #2,

3) The bank wanted only to receive contracts signed by the seller and buyer. If that contract did not go through, the bank directed the seller to negotiate another contract with another buyer and submit that contract for lender approval.

So, as you can see from my short list of examples….it’s always different. Each bank and even different Realtors handle the presentation of short sales offer differently.

Deborah Maday - Broker
Peninsula Realty Group - New Jersey
1 vote Thank Flag Link Thu Oct 9, 2008
Deborah Madey, Real Estate Pro in Brick, NJ
I would highly doubt that your offer has been seen by the bank. My team and I do hundreds of short sales. The major lenders neither have the time nor inclination to review multiple offers. The listing agent and seller should accept one offer to execute and negotiate with the bank. Even indicating to the bank that there may be back up offers can be extremely counter productive and start the entire negotiation process all over from square one. Most likely, you are being told by the listing agent that your offer is in 2nd position should the current offer fail. In reality, if an offer with a better chance of closing comes in anytime between now and when the bank responds, your offer will be bumped. It's a matter of watching out for the seller's best interest, which is the primary duty of the listing agent.

I would put very little stock in being told you are "second back up". Instead, my recommendation is to shop for other homes, and leave your back up offer in place - but don't count on it. If it happens, and sometimes it does - it's meant to be. If not, your dream home is probably right around the corner. : )
0 votes Thank Flag Link Fri Jul 16, 2010
After reviewing all the answers including mine from yesterday I want to respond again. You are "second"backup. That means the Bank has accepted an offer and is in some stage of signing the contract. We will call this person the "primary". In front of you is the "first" backup person who is hoping the financing or something else will fail for the primary and they can then become the "primary. This then would move you up to the "first" position. Rarely does this chain of events happen running down to the "second' Backup. I'd "move on"! Why wait for something that probably will not happen. Too many good homes and great prices in the Woodbridge area.
0 votes Thank Flag Link Fri Oct 10, 2008
Hi Susan:

Yes, the bank will see your offer IF the listing agent spend the time to send it to the lender(s) and follow up with the lenders. I have contracts that I sent the lenders several times and due to the huge mess (I can only image) in the loss mitigation department (especially the large institute with tons of short sales), they sometimes get lost. So, make sure you follow up with the agent who follow up with the lenders to ensure they received the offer and who will continue to follow up with the lenders to make sure each step is completed by the lenders concerning your offer.

Sylvia Barry
Marin Realtor
Real Estate in Marin Countyr
0 votes Thank Flag Link Thu Oct 9, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA
remember that the owner is still the seller - not the bank. if you are trying to find out if your offer is acceptable to the seller, ask the listing agent. then ask the follow up question about the process. Contrary to common understanding, the seller does care what the offer is, because the seller could still be on the hook for any deficit beyond the sales price. So, let's say there's a house listed for $300k, someone else offers $250K cash... then you come along and offer $280K with a financing contingency. The bank may like the cash deal; the seller may like yours better. The seller does not have to present more than one offer to the bank for approval. So, focus your negotiations on the seller. Good luck!
0 votes Thank Flag Link Thu Oct 9, 2008

It depends on the Bank's policy. If you were told you were the "second backup", I'd assume they did review your offer. Why remain in the backup position? Why mess with Shortsale homes with the large number of foreclosed homes available to consider, why inflict the stress and uncertainy upon yourself? Until the Settlement documents have been signed, you have no guarentee that what the Bank agrees to will become reality. By the way, you are welcome to join me at my free Home Buyer seminar on the 18th at the Woodbridge campus of Strayer University. Starts at 1pm. See my website http://www.military-realestate.com for info.
0 votes Thank Flag Link Thu Oct 9, 2008
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