Question Details

Mrero A. Mge…, Home Buyer in Leominster, MA

I need to get some information about Short Sale Rules and procedures. Back in mid-July, my wife and I put an

Asked by Mrero A. Mgeni, Leominster, MA Fri Aug 22, 2008

offer on a short-sale home. The sellers came back with a counteroffer of full price. Knowing that it was still a good deal for us, we accepted the counteroffer and essentially offered the listing price for the home. The offer was accepted, and was now going to be submitted to the mortgage company along with other shortsale paperwork. We are now in August and while inquiring of sellers' agent about where things stood with the transaction, my agent was today informed by the sellers' agent that in addition to short sale documentation not being quite complete, there are 4 offers along with ours that essentially the bank is considering, even though the sellers OFFICIALLY accepted our offer. I'm thoroughly confused here. Is there a legal basis for a seller (& his/her agent) to continue to entertain and accept other offers after they have OFFICIALLY accepted mine? I have not even broken this latest bit of news to my wife. She will just drop dead. Please help!

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3
Why not call the REO department of your mortgage company and ask them for specific information?
Glenn
1 vote Thank Flag Link Fri Aug 22, 2008
It is pretty standard practice for a bank to look at multiple offers (all of which may have been accepted by the seller contingent on lender approval) when they are considering whether to allow the seller to do a short sale. The banks may not even allow the seller to sell without assurances that the property has been marketed after an offer comes in because they want to be sure that they are selling the property for the highest price. If they don't have the assurance that they are getting as much as possible to mitigate the loss they will experience in writing off part of the loan, they will foreclose.

Unfortunately, I don't believe that there is a law that prohibits this. The lender basically acts as a lienholder yet they wield significant power here because they do not have to allow the seller to sell.

My advice would be to see if you can find out from the listing agent what the highest offer is and, if possible, increase your offer so that it is higher than the highest offer.

Here in California, we have an addendum to the purchase agreement that informs buyers of the issues that you bring up. Because the listing price usually has nothing to do with what the bank is willing to allow the property to sell for and because I've had so many banks decide to foreclose even though I had the highest offer, I encourage all but my investor clients or my clients who really do not need to be certain about the property that they are placing an offer on to avoid short sales.
1 vote Thank Flag Link Fri Aug 22, 2008
Check out this link, it may prove to be helpful!
0 votes Thank Flag Link Fri Aug 22, 2008
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