Bryan Garcia, Home Buyer in 91739

Short Sale Negotiations Help

Asked by Bryan Garcia, 91739 Fri Jan 2, 2009

My family and I recently offered $800,000 for a short sale up the street from us. Our agent whom we had previously lost a negotiation to on a previous house contacted us and asked us if we were still in the market as a house up the street from said original house was available. The new house a short sale property was a dream come true for us, and we quickly offered the asked $780K. Our agent called and notified us that the seller had received other identical offers and asked if we would like to increase to $800K. Since our deal was an all cash offer, our $800K was finally accepted. My trouble is all of the communication going on with this property is thru the seller and our agent. Our agent is very defensive in releasing information regarding the agent representing the seller, the company to whom which the $$ is owed for the original loan and the negotiation company which she told us was different from the lender. I'm curious to know if this is normal practice in a short sale?

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In your purchase contract, there is a confirmation of agency relationships on page 7 of the CA RPA. It states who is representing the buyer and who is representing the seller. Communication from the seller/lender goes directly through the seller's agent to your agent. Your agent cannot contact the sellers directly and many lenders will not talk to the buyer's agent at all, even if your agent feels that the seller's agent isn't properly negotiating. That's when your agent and their broker need to contact the seller's agent/broker and make sure it's being done correctly. In this market, many agents haven't had the experience or the knowledge in what to do, and in many cases, the lenders need to have a weekly or bi-weekly call to keep them accountable to the sales process.
0 votes Thank Flag Link Tue Jan 6, 2009
Hi Bryan,
All good answers so far. To reiterate some of the important points:
-Information regarding the sellers agent should be available to you, and should be in your purchase contract. This disclosure is required by law ( and especially critical if same agent is representing both buyer and seller).
-All of your communication should go through your agent (or their broker, if concerns about agent). Likewise, the sellers communication should be through their agent. It sounds like in this case that communication directly between the seller and your agent is common. That is not normal practice.
-Seller actually has much less to do with decision making than the note holder (company to which the $$ is owed for existing loan). That leads to my last two points...
-Many of these note holders are not yet very well set up to handle these Short Sales and therefore
1) Communication is often more erratic than a 'normal sale', and
2) I would say that at this point in time the majority of the short sales are still not closing, though the percentages are increasing.

Good Luck in your venture,
Mark Manning
Century 21 Prestige Properties
951 237 3741
0 votes Thank Flag Link Fri Jan 2, 2009
Hi Bryan,

I am a bit confused as to why the company to whom the money is owned for the original loan and the negotiation company is different from the lender. The listing agent should be dealing with the lender and the seller, your agent should be dealing with you and the listing agent.

I would contact your agent and discuss your concerns. Please remember that just because you made an offer on a house and it was "accepted" by the seller, it does not mean that the bank will accept it. They do not have to. I have seen it happen with short sales. However, I have also seen it work out with short sales as well. So, keep that in the back of your mind that it may not work out.

Bryan, I know short sales can be very frustrating, but keep in touch with your agent and if you have questions, always ask. I am thinking the listing agent may have hired a negotiation company to help get this taken care of for you. I hope it does and good luck to you!

Joan Patterson, B.A., A.S.P., G.R.I., Realtor
Keller Williams Realty
0 votes Thank Flag Link Fri Jan 2, 2009
Hi Bryan:

The common practice is for your agent to speaking with the seller's agent, by your question I don't quite understand if the seller has an agent why he/she would be communicating to the sellers directly. As Realtors there are rules and standard practice, one of which is if we are representing the buyer and the seller has an agent, we cannot contact the seller except through the agent, unless the seller contacts us first.

Many times we as agents representing the buyer do have a hard time getting any type of communication for the listing agent. I would suggest that you call your agent explain to them your concerns and let them know you want to know. and ask them to let you know what ever is being communicated by him/her to the other side. If that doesn't work then most defiantly you can contact their broker. Remember short sales are not short, they take a very long time and the banks unfortunately do not get back to the agents in a timely manner. Also remember that even if the seller says yes the bank can say no. They could also renegotiate the price.

Good Luck and Happy New Year!
Diana 909-945-5763
Web Reference:
0 votes Thank Flag Link Fri Jan 2, 2009
No 2 short sales are alike.

You should be able to locate the contact information of the broker who represents the seller (if the seller has one) in the packet of information you should have received with your purchase and sale agreement.

Your agent isn't privy to any information pertaining to the seller's mortgage balance; only the seller and seller's lender are privy to that information; and the seller doesn't legally have to disclose this information to you. Nevertheless, the seller's outstanding balance doesn't matter anyway for you, because you're going to pay LESS THAN that balance (hence why you're purchasing this home as a short sale).

I can't state for certain what's going on with that negotiation company in this deal without more details; however, I suspect that negotiation company might be an investor/rehabber (who's assigning his/her contract to you). If that's the case, then there's nothing abnormal going on with this transaction. It's fairly common and straight-forward transaction.
0 votes Thank Flag Link Fri Jan 2, 2009
Hello Bryan,

To answer your question, No, it is not unusual for all communication going on between the agents representing the buyer and seller. However, I'm concerned that your agent is being so defensive in answering your questions, questions which are not out of the norm and you have every right to ask. Your agent has a fiduciary obligation to look out for your best interest. If you feel that your questions and concerns are not being taken care of then by all means contact your agents broker and ask to meet with them and your agent so that you may address your concerns. Good luck.

Happy New Year,

0 votes Thank Flag Link Fri Jan 2, 2009
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