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Charles, Home Buyer in 33618

Question about a short sale contract

Asked by Charles, 33618 Sat Jun 7, 2008

My GF and I put in an offer for a short sale a couple of weeks ago. The seller was supposed to fill out all the paper work and accept our offer. The dealine came and went. The realtor tells me shes been having a hard time getting the papers back from the seller due to certain circumstances. TOday I noticed the price of the home went down by 10K. Obviously they are stalling in accepting our offer in hopes of a better offer.
What can I do? she keeps telling me that they are checking into speaking with the lenders, sorta of pre approval from the short sale banks. Is what the realtor doing ethical? Am I suppose to get copies of the accepted offer and the house comes off the market? how does this work? help!

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Answers

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Charles

Even if the seller accepted your offer, that is one of many steps. That is the initial acceptance, but it's the lender who will make the FINAL decision.

A short sale doesn't mean a short period of time --- far from it. It may take more than 45 days to get a response from the seller who can accept, reject, or counter the offer(s).

Prior to the property being offered as a short sale, the seller and the listing agent should have already provided a lot of information to the lender that justifies the short sale. The lender could approve the short sale listing, or wait until after they receive an offer.

Regardless of how often the agent follows up with the lender, it is not going to expedite the process much, and may even a source of annoyance. One loan negotiator even has this greeting on his voice mail "Calls to follow up on status will not be returned as they only delay the process." Most negotiators may be handling 300 short sale files. If each agent calls each day, can you imagine fielding 300 calls a day?

Depending on the MLS rules and what the lender instructs the listing agent to do, the house could remain active on the market until after the lender --- NOT the seller --- officially accepts an offer. If another offer comes after yours, and it's deemed to be better than yours, the lender could accept that offer instead.

That's why when writing an offer on a short sale, give it your best shot. Submit your best and highest offer. A short sale doesn't automatically mean you should lowball an offer. Some short sale listings are very close to their true market value. This is where a realtor can help --- by providing guidance on comps, market conditions, and writing your offer.

Here's a very good article on How to Buy a Short Sale http://homebuying.about.com/od/buyingahome/bb/BuyingShortSale.htm. You'll find links to other articles, but start with this one.

Good luck!
1 vote Thank Flag Link Sat Jun 7, 2008
Charles,
Your contract probably specifies, "third party approval." This means the bank has to approve the seller's contract. By dropping the price they are more then likely attempting to attract other buyer interest. In doing so they may be trying to drive the final sale price up.
Is this ethical? Not by my definition but it happens all the time with these types of sales.
If your deadline has been missed, you may want to consider recovering your deposit and moving on....if they are genuinely interested in dealing with you this may get their attention. Then you will need to decide if you can trust them enough to move forward with the sale.
Unfortunately, short sales come at an expense!
Good luck,
1 vote Thank Flag Link Sat Jun 7, 2008
What if a short sale contract does not say "as is" anywhere on contract
0 votes Thank Flag Link Sat May 11, 2013
You mentioned that you are using the seller's agent, have you signed a buyer broker agreement with them and/or have they explained and had you sign a Brokerage Relationship document (single agent or Transaction broker or no representation). If you have signed anything other than "no representation" you should ask to speak with their Broker. If you have not signed anything, you should begin interviewing other agents to represent you on this or any future transactions!

Good Luck!

Steven J. Pahl e-PRO
Keller Williams Tampa Properties

813-319-6423 Office
813-763-7245 Cell

Steve@StevenPahl.com

Referrals Welcome!
Web Reference: http://www.StevenPahl.com
0 votes Thank Flag Link Sun Jun 13, 2010
Unfortunately it looks like you have been receiving some bad advice. Short sales can take from 30-60 days for an answer. And the sellers should have signed the offer to make it a contract before it was sent to the bank for their approval. If the bank doesn't see a valid contract they are not very likely to work too hard on that file. When the negotiatiors at the bank are looking over a stack of 100-200 files on their desk they will definitely start with the ones that make the most sense and are put together correctly. These people don't have time to track down details and missing paperwork.

I definitely think it is time for you to start looking at other properties. If you have nothing signed and it is still active, you have no deal.

Good luck!
0 votes Thank Flag Link Thu Jun 12, 2008
Hi Charles, If you put in an offer in for a short sale, usually by that timeframe, the seller has no rights. You and your realtor should be dealing directly with the financial institution that is holding the paper on the property. Unless it is listed already with another realtor or the realtor you are presently working with. When these properties go into what is called pre-foreclosure which is a short sale, the financial institution takes over control of the property by adding itself to the deed. When in default, the bank has that right to be the controlling decision maker on said property. What seems to me, which obviously I do not have all the facts, that your agent/realtor is not aware of the process and is not knowledgeable in the rights of you the buyer. The decision on short sales is usually a 24 HR turn around!! So, if the price of the home is being lowered, and the agent/realtor is telling you she is having trouble with the seller, then you need to get a new realtor that knows and understands your rights and the process. This process is very simple and needs to be understood first and foremost by YOU before going into this agreement. Clear title, liens, assessments, back taxes, structure damage to property, etc. all needs to be addressed. If I may help, please contact me via 239-298-0600. Thank you, Mary
0 votes Thank Flag Link Thu Jun 12, 2008
Charles you are exactly correct it is a MFR MLS Rule that once it is signed by the seller and buyer it still goes PENDING and they wait on approval from the bank.

Have your agent push them for a signed contract or don't waste your time. If you DO go into a contract watch your dates closely, the banks can often take longer than the closing date you list on the contract, so make sure you get extensions to CYA

GOOD LUCK TO YOU :-D
0 votes Thank Flag Link Wed Jun 11, 2008
Charles, Unfortunately, what you're experiencing is very common with short sales. With short sales, the normal rules of buying real estate do not apply. (Although, I'm not sure I understand what your agent is doing, unless she just explaining what the bank is telling her.)

The lenders don't seem to care about contract dates. And sometimes the lender needs more paperwork from you. If ALL the documents the lender wants are not submitted at the same time, they might just set the file aside and not even give it another thought. And there's also the possibility that they'd rather foreclose, although that's not as likely as them hoping for a better offer. Under any of these scenarios though, the only one that would be your agent's fault is if she didn't get all the proper documentation to the lender. And even that might not be her fault, if the lender did not properly communicate with her.

So yes, it may be your agents fault. But from my experience, it's usually the lender that holds up the process. They can stall everything for 60-90 days sometimes. All they care about is how much money they can get. So yes, while you're waiting in limbo, the lender is doing all they can to find a way to get more money for that property.
0 votes Thank Flag Link Sun Jun 8, 2008
Charles,
Do you have a signed transaction brokerage agreement with this agent that presented the offer?
If you do not, then you have the right to choose another agent to work with. If you do NOT have a signed, executed contract then she does not have to put the home into pending.
I would highly suggest you get a buyer's agent involved.... It sounds like this is the first offer on this house and the Bank hasn't yet agreed to even do a short sale yet...
Mark
weichertmarkz@yahoo.com
0 votes Thank Flag Link Sun Jun 8, 2008
No the Realtor isn't in violation if he has presented it to the seller. You do not have a signed and executed contract. They are doing what they are supposed to, by getting the highest and best offer for the sellers. When did your offer expire? I can help you with this and you need help. Don't try this alone. Call me, 813-417-6698 or email me, ceppym@yahoo.com. I will try and put you on the right track. Short sales are difficult and the Realtor needs to know what they are doing and explain what they are doing to all parties.
0 votes Thank Flag Link Sat Jun 7, 2008
I'm using the sellers agent on my behalf and it is on MLS. I signed the offer on June 27th and have been waiting for the signed offer acceptance from the seller. the Realtor keeps making excuses as to why it is not signed yet. Is the realtor in violation?
0 votes Thank Flag Link Sat Jun 7, 2008
Charles,
Did you go directly to the home's listing agent??? Or are you using a buyer's agent on your behalf?
Mark
0 votes Thank Flag Link Sat Jun 7, 2008
Did you buy the home through a realtor?? Is it listed in the Multiple Listing (number starts with a T)?
If this property is listed in the Mid -Florida Regional MLS there are rules that state the property must be placed as Pending if a signed and accepted offer has been recieved from the seller. An agreement would have needed to be signed by both parties to allow the property to be marketed while under contract "called first right of refusal (kick out clause).
Mid Florida Regional rules strictly state this and the selling agent is in direct violation and subject to fine. Your realtor should know this!! If you need more visit my web and email me directly...
Mark
0 votes Thank Flag Link Sat Jun 7, 2008
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