How Should You Handle Multiple Back-up Offers with Short Sales?

http://theshortsalegenius.com/how-should-you-handle-multiple-back-up-offers-w...

Often, we hear from the different 'Departments of Real Estate' are teaching listing agents that they MUST submit all offers to the lender. Unfortunately, they do not seem to understand contract law and that a non-principal can not accept a contract on behalf of a principal. Yes, you are required to be fair and honest with all parties, but your fiduciary duty lies with your seller. If your seller only accepts one offer, you do not have the right to send any other offers on to the bank, unless your seller tells you to. If you were a buyer in an equity sell, and the buyer signed a contract with you, with some contingencies, but then the seller went ahead and accepted another offer, you would have the right to sue for damages.

In a short sale, it is true that you don't have an executable contract if it is written, 'subject to lender approval' but at the same time, you don't have the right to overstep your position as an agent and go against your seller's will. If they don't want to submit back up offers until the first offer submitted is countered or rejected, that is their will as a principal in the transaction. You often do more harm by getting an unrealistically high offer approved, that will be the first to cancel escrow and the home will often end up foreclosing which is worse for the bank.

Category:

Education

Tags:

• Lee Honish
• Trent Chapman
• short sale
• multiple offers
• foreclosure
• highest offer

[vachief]

...Short sales are a joke on the unsuspecting general public. The bank wants 100k and won't take less, realestate agents throw out a low ball listing price of 60k hopeing to create a feeding frenzy and drive the price to the banks figure. It's not working and wastes everyones time not to mention gas money. lol

[rewealthyone]

cont'd

so unless you are solely focusing your marketing and sales to an end buyer who will live in the property long enough for it to acquire an increase in value due to appreciation, (southern california not withstanding) it would never make sense to an investor to even look at a piece of property that was pre-approved at a sale price prior to listing..

[rewealthyone]

cont'd. FMV (fair market value) to an investor who is purchasing either to hold/flip ask for a higher % off from the bank because what they are calculating 4 is risk--holding costs b4 a re-sale, risk of cost fix/update and a % of profit. I would never allow an agent to pre-negotiate for me as an investor; and certainly not have bank approval of a sale $ that the bank would accept before MY due diligence at contract. Pre-negotiated deals to an investor do not have appreciation time to acquire $.

[rewealthyone]

to lyntomason: you're missing some of the basic tennants of doing a short sale, that is: 1. that the banks won't tell you what the BPO is...it's a guessing game--sorry 2. that doing a drive by BPO will always be higher $ than an internal--sorry 3. monthly depreciation based on how long the property sits on the market and lastly that the amount offered should be comensurate with a percentage off of the FMV--not an driveby BPO. In essence approval of a short is overpaying the bank in your scenario

[lyntomason]

THE WAY I WOULD LIKE TO DO A SHORT SALE:

1. Help seller get set up for short sale with there lender. Letters-Finances..etc. 1 to 2 months later.

2. Get Approval and BPO from lender. Lender says, the owner can do a short sale.

3. Now we can list property with an approved purchase price and S.S. Approval from lender.

4. No more playing games. It should be out lawed that homes can be listed before Short Sale approval.

5. HAFA is doing this, but I don't think agents or lenders get it.