The Bank is the final say so in a short sale. They are not obligated to accept any offer submitted. They're really not even obligated to accept a short sale, period. The bank's goal, while trying to "help" still is to try and recoup as much of the original funds as possible. Is is "ethical" for the bank to set the minimum amount acceptable for short sale? Why not? Remember, the seller is the defaulting party - the bank held up their end of the contract. This differs from the Realtor telling the client what to accept or not accept in that the Bank has a contract with the seller already in place where the parties have already made the agreement on what money will be paid out and paid back. Therefore, the bank does have a right to set the price with the seller. The price they set for an acceptable short sale contract tends to be less than owed. The Bank then determines whether to collect the remaing funds directly from the seller under a separate Note, or not. That would all be part of the negotiation process between the agent and the loss mitigation advisor. Now, having said that, hopefully the seller has a professional realtor that understands the short sale process and is an extremely pursuasive negotiator! Great questions,,,keep 'em coming!
Tina Evans, Principal Broker