The first offer has to be considered and given the chance to counter the counter. This is the frustration you have to go through to get the deal. Buyers agency is Free! So your agent should be handling this for you and following up with the case officer. If your agent is on the ball they should have communicated or presented an indepth market analysis that backs up your offer and gives the case officer something to help him/her get the offer approved. If you are just placing an offer without the homework you are at the mercy of the banks slow system.
I'm late to the dance but I echo what is being said - short sales are a nightmare and the agents handling them......I trust that you had an experienced buyer's agent...
They will keep it active, they will drag their feet, they will say one thing and do another and they will have no heartburn about it. You need to have the right mindset for chasing these homes, that's something the Obama administration could really improve! I blogged on this: http://www.trulia.com/blog/hank_miller_-_associate_broker/20
Let me know if I can help -
Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
Prudential GA Realty
This sounds like a typical short sale.
Be prepared to wait more than 30-60 days. I would ask the listing agent if there is more than one mortgage on the property. If there are two mortgages then buckle up for a long ride. You may not get a response for 3-6 months.
I have been advising my buyers not to consider short sale properties unless they are being managed by smaller banks and only have one mortgage. This way the agent has a direct contact with the bank for quick answers, and you only have to deal with one resource. Most buyers back out of short sale deals because it's too difficult to keep waiting for confirmation when there are so many other properties available.
Your question is a good one and one and one we have seen prviously on Trulia.
The sinerio you have desrcibed outlines a normal situation associated with "short sales." Since there may be contingencies related to the sale that need to be satisfied both the seller and the bank are reluctant to remove the property from the market until all contingencies have been satisfied.
David Brower, Assistant Manager/Realtor
Thanks for your answer, David. Is it okay for the listing agent to ask us to give $1000 as earnest money, WITHOUT signing a binding agreement with a contingency. If they continue to receive backup offers, each paying $1000, at what point will this money be returned to everyone? Is it a common practice in short sales to do this? Shouldn't we be expected to pay the earnest money only after we have had a chance to inspect the house plus don't you think the seller's agent should give us some letter of acknowledgement for the earnest money?
As far as how a short sale works... listing agents are put in a complicated spot since the banks can take at least 30 days to respond but it seems like it's realistically more like 45-90 days to actually work out a short sale. I had one last year that took 9 months. Seriously! There is no rhyme or reason sometimes and it just depends on the individual bank holding the first and/or second mortgages. When a short sale offer is submitted with an agent, your agent would generally give a time frame to respond (which in short sales it could be 30-60 days) and a contingency that the offer is subject to lender approval. The seller would sign it and so would you and then you would technically have a "binding agreement" with a contingency. The status in MLS should then be changed to "pending-contingency". Most listing agents don't want to do that, however, because in reality that first person presenting the offer generally doesn't wait around long enough to get an answer from the bank and then the house has been basically "off market" even though it appears in the MLS as under contract. You probably wouldn't waste your time looking at a home that is pending in MLS and agents know that. Probably what was presented to the bank was an offer that was not signed not "bound" with a "binding agreement date" and just sent on to the bank to get the ball rolling for the short sale. Yes, in the meantime, better offers could come in and those offers would be presented as well. Being how complicated and how your interests are not going to be represented by the listing agent - he/she is working hard to help client avoid a foreclosure and get any deal done, not just yours. You should really really really get an agent to represent you. If you do but yours has no experience in dealing with short sales, you should ask him/her to get some help. If you have 45-90 days to wait, you could end up getting a good deal, but you must be patient. Good luck.
If I can help you in any way and you do not have an agency relationship with a broker, please give me a call.
Crye-Leike Realtors, Assistant Manager/Realtor