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Do Buyers Think They are Getting Slick?

Real Estate Sales is just as complex as the markets we serve. As the market evolves so do the strategies of agents trying to get their next deal into escrow. This is a tale of what is going on in the Hemet - San Jacinto CA Valley and what one REO listing agent is doing to try and stop the process before it ever gets out of control.

I realize that first time buyers are frustrated by ‘the system' and that they want to take advantage of the current real estate market while they still can. Many fear that the market will quickly turn and they will be unable to afford a home ever again, once the market changes and goes back up. Many are anxious and even stressing over the thought of not being able to take advantage of the Federal Governments $8.000 tax credit for first time homebuyers.

Regardless of the circumstances, agents are enabling their clients to commit some fraud in the hope of earning a commission. Or perhaps, some of the slickest buyers are being even more despicable by bringing in multiple real estate agents into their web of deceit, in an attempt to buy a home in this current market and times of financial uncertainty.

The frustration for many wanna be home buyers escalates week after week as their agent takes them out for a tour of new homes on the market followed by an hour or more of paperwork and several days before finding out that the home they wanted to buy has been sold to another buyer.

THE MULTIPLE OFFERS BUYER

Whether it is buyers instructing their agents or agents suggesting to their buyers is unclear; but buyers are now writing offers on multiple properties at the same time. In essence, they are treating our industry like a pile of SH*T - thinking they can throw enough of it against the wall to see what sticks.

My personal frustration comes from one of my active bank owned REO listings that has had 4 offers accepted by my asset manager only to have the buyers turn not sign the counter offers and addendum's - because they bought another home.

So the thinking is if you write 10 offers and one comes through, great, you got a new home. If two offers are accepted - even better you have a choice. When three offers are countered then buyers are feeling like they are in control.

HOMEY DON'T PLAY THAT GAME

OK. I may be dating myself to the 80's variety show that launched the Wayan Brothers and Jim Carry - In Living Color. That's OK, it just lets you know I'm old enough to have gone around the block myself once or twice and I am not going to be a participant in your games.

So how do I stop you, you want to know. That's easy - If you want to play you are going to have to pay.

Here is the new rules:

One, If you are an out of town agent and you don't have access to my electronic lock boxes then you are going to have to come to my office and pick up a key - leaving a $25 key deposit.

Two, if you want to submit an offer I will only process it once I have your clients earnest money deposit and yes I will deposit it directly into the trust account on the day it is received. If you are not accepted your money will be refunded right away. If you have opened escrow on another home then we will have to figure out what steps to take to see if you are or not entitled to a refund of your deposit. I'm sure it will take at least a week or two to have my attorney review the situation and offer me the proper legal advise...something I would strongly suggest any agent who willingly plays this game to get. I can't tell you where it is - but as one professional to another, we both know this is not the way we are expected to treat one another or the public - and yes my corporate / bank seller is still the public. Lets not forget who is taking the bath here - not your client with the sense of entitlement.

So go ahead. And "Make My Day". For those who are too young to remember that was a very famous Clint Eastwood line form one of the Dirty Harry Movies.

UPDATE - The Morning After (Sunday)

OK, I am a little blown away with the responses I have received and was really blown away when I realized this blog post was Featured by ActiveRain. I know there will be a lot more than the 15 or so comments I have already, by the time this day is done. My last Featured Blog Article, The Next Wave of Bad Loans - Option Arms, currently has 115 comments - none of which I replied to. In part because I did not want to influence the conversation and in part because I was over whelmed. I did not allocate the time necessary to get back to everyone. Well, my commitment - at least for today - is to answer everyone's comment and engage in the conversation - so please leave your comments and lets discuss this through.

U P D A T E M O N D A Y M O R N I N G

Yikes, it looks like I am in for another busy day - today this blog went FEATURED (yeah :-) ) so I am expecting a wave of additional comments - which I welcome with open arms. This blog has become a true conversation with me answering each and every comment - one-on-one.

However, many of the comments allude to the same issue - that the banks are taking forever to respond to offers. Well, that is NOT the case in my office with the banks I work with. I have a set procedure that my team and I follow - I spell it out in this post: REO LISTING AGENT OFFERS INSIDE SCOOP ON "HOW TO WRITE AN OFFER FOR A HEMET - SAN JACINTO CA BANK OWNED HOME FOR SALE" My offers are presented in a timely fashion and responded to within a day or two, 95 times out of 100. One exception is a rule one of my banks imposes is to help you and that they require the listing to be on the MLS for 72 hours before they will consider any offers - so this means I can't pre-sell the deal and get it approved before it even goes on the MLS (but I do love it when that happens - and you would too!)

I would also like to point out that Broker Bryant has weighed in on this topic (#4 & #5). Like many of you I respect BB and the opinions he offers. However, in this case I want you to fully understand that when BB is discussing this issue, he is referring to a CASH OFFER and NOT an FHA FINANCE. Now my fault for not making this clear - but please understand that the scenario above is just that - an FHA offer and as we all know, FHA is low on the food chain (right or wrong) with anyone considering multiple offers.

OK, I promise I will answer every comment posted here - so if not today, please check back - and don't be bashful about jumping in on other conversations - there is a lot of good talk going on in both directions here. I am not an REO Agent that is afraid to talk about what I do - everything I do is above the table with the end result of looking out for the best interest of MY CLIENT - The Seller.

Oh, and one more thing - a couple of requests have come in to reblog this conversation and this is fine. I think I have the correct setting now - if not let me know and I'll figure it out.

Now have a blessed day - I have some offers to process!

John

Until Next Time, Have a Blessed Day,

John Occhi, ePRO & Five Star Certified REO REALTOR®
www.JohnOcchi.Com
Hemet - San Jacinto Valley, CA
The Excellence in Real Estate Team @
Allison James Estates & Homes
2281 W. Esplande Ave, #102-B
Next to "Starbucks"
San Jacinto CA 92582
(951) 654-5550

This blog and the contents written here is the intellectual property of John Occhi, Hemet - San Jacinto Valley REALTOR® in the South West Riverside County region of the Inland Empire of Southern California. The views and opinions expressed are just that - views and opinions of John Occhi and those who comment. Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance.

This blog is part of the ActiveRain Real Estate Network, which is a social network highlighting the best of Web 2.0. Information is provided with the intent of educating and assisting home owners, home sellers, home buyers and real estate investors with information the can be used to make better real estate decisions.

I am proud to be a full time REALTOR® who is proud to be a contributing member of the ActiveRain community.

Posted by John Occhi, ePRO, Hemet-San Jacinto CA Real Estate, 951-443-6259 on 09/20/2009 02:37 AM

Comments (116)

Multiple Offer Buyers in the Home Buying Channel

real estate, market, offers, buyers, agent, hemet, san jacinto, ca, reo, asset manager, 8000 tax credit

Originally posted at: John Occhi's Blog: Do Buyers Think They are Getting Slick?

This post has been included in California Information Riverside County, CA Information Hemet, CA Information
Post is included in group: ETHICS and the REALTOR
Post is included in group: CALIFORNIA REAL ESTATE
Post is included in group: CALIFORNIA REAL ESTATE
Post is included in group: 1st Time Buyers
Post is included in group: 1st Time Buyers

116 Comments on Do Buyers Think They are Getting Slick?

SEP

Great post and helpful info! Thanks, i enjoyed reading this. Have a great weekend.

John

I can certainly understand your frustration- and I do think there is a lot of multiple offers floating out there. Which was a result of short sales and the prolonged waits for answers from lenders. Deliberate underpricing of listing agents who are trying to create "demand" and manipulate buyers into Highest and Best" bidding wars. Compounded by...

Negotiators who were over worked and inaccessible and months and months of waiting for frustrated serious buyers who simply could not get a home. So I agree with this practice ? No I do not.

Until the process is streamlined and Listing agents quit fishing for multiple offers, it will be a long time before we can return to return to normal. Buyers are simply to trying to buy homes. Many have to try repeatedly before they can finally get an agent who will submit the first offer, and once acceoted move it to pending instead of prolonging the process and submitting so many at once.

Receiving multiple offers complicates matters and creates hard feelings all the way down the line. There can be only one winning offer. As the time clock ticks, buyers are in jeopardy of not getting answers in time to take advantage of the tax credit for many as you pointed out this would exclude them from getting a home period.

No this is not the time for games, it is the time for fast answers and more closing.

Good luck and sell well.

I'm going to pop over to Broker Bryant's blog and send him over here to weigh in. I say this because he has written a post about HOW to write multiple offers, to get the best buy. I can't remember his wording on it, but I'm sure he'll explain it again. I do remember that he had valid points in the post, and good reasons for why buyers would want to do this. I'll go see if I can find him ;-)

John. Lisa sent me over to comment because I present multiple offers quite frequently and it works like a charm. First. I don't work for your seller and could not care less what they think. Secondly, trying to keep a buyers escrow money when there is no signed contract will never happen.

Banks are notorious for playing games with buyers offers. They sit on them for weeks. They have no problem negotiating multiple offers at the same time (as they should) with no intent of accepting more than one. Then of course even when they do accept one they add 20 pages of addenda stating they can back out of the deal any time they want for any reason.

So....as a smart buyer agent I have found a way to take control away from the lender. My buyer does not have to play this foolishness. So this is what we do.

By the way it's not fraudulent or unethical. It is playing within the rules that the REO market has given us. If it's good for the banks then it's good for the buyer.

John, I meant to add. One of the reasons for this happening is because the lenders are treating the real estate market place as an auction. By the way I agree with this way of marketing property. As an REO agent you can't create this kind of an environment and the cry foul when the buyer's agent figures out how to work it.

So what if the asset manager lost 4 deals in a row? That would be an EXCELLENT day for a buyers agent in this market. In my market it can take 15-20 offers. well above asking price, to finally get one accepted.

John...

I have to park for this discussion. Looks promising :)

TLW...ROAR!

The banks have the ability to stop all of this 'gamesmanship' by establishing some concrete guidelines and deadlines for themselves and buyers/sellers. The banks 'change the rules' on a whim at anytime just to suit their immediate desires and everyone else is expected to just fall in line like good little sheep.

We and our attorney have been working our asses off trying to get answers from a various banks on several short sale transactions for many months. The banks say one thing one week and the exact opposite the next. Their left hands have no clue what the right hands are doing and when someone has the audacity to cry FOUL, they simply threaten to foreclose and move on.

I'm getting sick of the way the banks are treating the public on these transactions. They need to come clean, set up some workable criteria for all to follow and let's get this economy rolling again. All the 'games' they are playing are doing nothing but prolonging the problems.

This is very interesting...I am with TLW...I think I shall park and watch, because this is a hot topic and one that any of us could encounter! Thanks for the post!

John,

It's surprising how the deposit money has lost its significance.

If you have to write a cheque and have the money transferred out of your account, and you need a Mutual Release to get it back, then, the deposit is actually working. It demonstrates those buyers who are truly serious.

Brian

John,

It's surprising how the deposit money has lost its significance.

Brian

Here's a different point of view from a listing agent's perspective. Many of my short sale listings are priced deliberately under market. Yes, it creates a bidding war, but I represent the seller, not the buyer. I attach a tip sheet for buyer's agents to my listings in MLS. It suggests that buyer's agents should examine the comparable sales, which is simply good business practice in any real estate transaction, short sales notwithstanding.

It has been suggested by my company's legal counsel that buyers who write multiple offers may be violating a good faith convenant in contract law.

To avoid buyer fallout, all buyer deposits go into escrow upon acceptance. My sellers want buyers to put their money where their mouth is; otherwise, those buyers can buy something else. In addition, I ask the buyer's agents to promise me in writing that they will not write any more offers for that buyer upon offer acceptance that could threaten this transaction, and they will withdraw any outstanding offers. To break that promise could mean the buyer's agent may be disciplined for violating the Code of Ethics.

So far, it's working very well. Narrows the playing field to committed buyers.

Interesting reading the many perspectives. I do not have his situation in my market. But it is always good to be thinking ahead about what I would do IF I do have this happen.

John, we have bank listings, and have seen buyers disappear- it's part of the process. Why impede potential offers (asset companies seek a gauge, and offers provide that gauge) by creating a more difficult offer environment? Let buyers do what they need to do- if the offer was submitted **with all required documentation**, your property has a shot at being sold. Any interference with that opportunity would seem dicey: potential complaints to the asset managers, as well as a buyer that, but for the uncertainty of not having reviewed an "as is" addendum to their satisfaction, is unwilling to hand over their money prior to this all important disclosure...if I were seeking a bank owned, there is no way I'd hand over anything more than nothing until I read the terms of the purchase. Far too risky to wonder if my money will be tied up indefinitely. We don't have your extensive experience with bank owned; just my 2 cents.

I always get nervous when I hear of this practice cropping up. We had it briefly in Austin right before the dot com bust when it was very hard for buyers to get something under contract because of all the multiple offers. I haven't seen it with bank foreclosures at this point but can see that they could attract bargain hunters. Not sure what the solution is but I think it's fair that earnest money be delivered with the offer. Hope it calms down for you.

You can't hold a buyer hostage while the lender entertains mutilple offers. Applause to Broker Bryant.

Linda Metallo, Re/max Impact, Lockport, Il.

John - Like others, I understand your frustration. However, Buyer's Agents have no responsibility to make the seller's life easier. The banks created the rules (or lack thereof) and have attempted to manipulate the odds in their own favor. It sounds like BAs in your area are just trying to re-establish equalibrium.

Hi John ~ I think this is a tough call. I personally instruct my buyers that they can only put one offer in on a home at a time. They have to negotiate that out before they can move onto the next. I don't live in your market though and I can imagine that for buyers it is a very frustrating situation to put offers in to have them rejected while the next house goes under offer before they even get there...

I know as a listing agent you're there to protect your seller and obviously it's very frustrating for them too. Having said that, in your example it's a bank. They're not emotionally involved in the process, so I'm kind of leaning towards the buyers plight in this rather than the sellers.

I'm not saying that as an agent I'd do the same as it appears buyers agents are doing in your area. I tend to go by the book, so clients would have a tough time convincing me to write multiple offers on multiple homes, since it's not allowed by law.

I think this is a complex subject though and really can't be thought about in terms of black and white - there is a grey area. Response times of banks is one of the things you don't talk about for instance. I think that adds to the problem...

Okay, I think I'd better stop now - this is getting long enough to be a post of it's own.:-)

ya there are lot of factors that are going with so many people treating this industry like $hit part of the problem it that it has been so easy to get in this industry take a course online pass the state exam and you are in how hard is that its not like becoming a CPA so you get lots of bad apples

Fun topic. In short sales the lender can take forever to get back with an offer. I can see multiple offers or not depositing the money until the bank replies.

Here, earnest money is deposited within 5 days of a ratified, binding agreement. Acceptance isn't ratified. Banks take forever to make a contract binding. This is their fault. If they really wanted to sell it, make it binding asap by having the addendums ready asap. They need to beat the other banks at this game to get thier own properties sold. Right now the only ones to be mad at is the asset managers/banks. If they really want to get rid of these properties, they need to act like it. They are acting like unmotivated sellers right now.

Multiple offers are great for pushing up the price, but takes longer to get the property binding because the bank isn't moving fast enough. I just closed on a client 2 weeks ago that bought a freddie mac house. It was on the market on a Wednesday. We were the first to put an offer on this hot property at 8am on Friday morning. She had me a counter by noon. She told everyone that called that an offer was on the table. She didn't say at that point don't send it in. When agents hear multiple offers, they move on because they know its a waste of time if their clients don't have addition cash to compete for a property. We accepted that day and did not have to go through the multiple offer situation. Some agents sit on these offers on purpose so that the bank has the pick of the litter. But these agents can't be mad when the buyers have the legal right to back out. The listing agents can not get upset that their sellers aren't moving fast enough to make the contracts binding. My question is, how can the listing agent put pressure on the seller to make these contracts binding quicker? Or, are listing agents scared to do this because of fear of losing their bread and butter in this market? As a result, their frustrations are leashed out to try to control buyers and the selling agents. This not directed to anyone in particular. Just venting my own concerns and thoughts. I understand both sides. So, I would have to represent my clients in their best interest depending on who I am representing.

FLORIDA PINES

Thanks for getting the ball rolling on this conversation and your insight on this topic. I do agree that the mentality has started with Short Sales and the banks inability to process the offers in a timely manner.

I did my share of SHORT SALES back in 2007, before getting involved with the REOs. I was so frustrated with them that I swore the next one I listed I would put in the MLS at $1 - it was as realistic a price as what was going on at the time.

I wish there was an answer, but I do like your outlook - more answers and more closings.

JOHN - GLad you enjoyed the post - come back and see what the outcome is on this hot topic.

LISA

Thanks for thinking of BB - his opinion is always respected around here - he is one of the great mentors and teachers here in the Rain

John, good post. Lot of good points here. However, I side with the buyers being in control. Especially, when we have a deadline to meet regarding the $8,000. My buyers can't afford to sit back and play games with banks, because the banks are not moving their product like they should. If would banks would streamline the process and open the lines of communication, I think all your arguments become void.

BROKER BRYANT

As always, you have a lot of information packed into a very small space - and unfortunately I am often over winded when it comes to chatter

So, let me address your points (in italics) as you make them:

First. I don't work for your seller and could not care less what they think. - AGREED and the Seller really doesn't care what your buyer thinks. What they want is to close the deal

Secondly, trying to keep a buyers escrow money when there is no signed contract will never happen. I understand this - but as the Listing Agent I can insist on having the EMD delivered to my office. This will separate those who are serious and those who are throwing 'IT' against the wall.

Banks are notorious for playing games with buyers offers. They sit on them for weeks. To be honest, I think this is the biggest misconception out there. To start with, let me say that I am not a fan of big business or bureaucracies in general. I believe that often the left hand doesn't know what the right hand is doing and in the case of the banks - it is MY BELIEF that this is absolutely what is going on as offers are sat on for weeks on end.

Let me elaborate with my most recent dragged out experience. Got a listing in a nice established country club community - should be a no brainer. Unfortunately the house was really trashed. Client wanted to rehab the home. We submitted bids from our contractor for $15K and our termite inspector for another $6K. Meanwhile, the property is listed and overpriced - even overpriced once repairs were completed - appraisal finally came in $5K under list after all the work was done. Back to my example. Both bid on some of the same work. So, we get an offer in and the client wants a 2nd opinion on a termite report - do they tell me? No. I'm left holding the offer and holding the deal together and not getting a straight answer for nearly 2 weeks - still keeping the buyer on the line. It had nothing to do with playing games - it had everything to do with an overworked asset manager in an understaffed department that barely existed 2 years ago in an institution that may not be in business before the year is out. Personally I think there is more to it than the bank wanting to play games.

I read through your blogand do plan on responding to you there. I agree it is not fraudulent or unethical what you are doing. However I must point out (as I will on your blog) that they buyer you are referring to is an all cash buyer. I guess the question is how do you handle the FHA buyer who barely has the 3.5% down and no closing or rehab costs. We don't have trouble with cash buyers - cash is king here in California - just like Florida. The deals that get us into trouble are the buyers with a sense of entitlement - like it is their RIGHT to buy a home - at a discount - from the banks.

BROKER BRYANT

In your follow up comment you believe the banks are treating the market like it is an auction. well, I defer to my answer above and let me share an inside conversation I had on Thursday with an Asset manager regarding the price.

My asset manager actually apologized to me for the pricing of a new listing. She acknowledged that it is over priced. What the powers to be have figured out the entire principal of supply and demand - knowing that they have the inventory and can create the demand. Instead of playing the auction game, they would rather a well qualified buyer just wrote a good offer that sticks.

In the past two weeks, the same asset manager company has put 4 transactions into escrow with me for list price - despite numerous over list offers - they are looking for strength.

I just published a blog here that I published earlier in the week on my WordPress Blog - REO LISTING AGENT OFFERS INSIDE SCOOP ON "HOW TO WRITE AN OFFER FOR A HEMET - SAN JACINTO CA BANK OWNED HOME FOR SALE" This is a detailed insight on how I perceive the market - as an REO Listing Agent.

TLW - Keep an eye open and your heads up as the fireworks fly - I think it is going to be an interesting day. Glad you got a good spot to watch the action.

Totally agree with your thoughts... With that being said, and other comments being left I can agree with most people too. Essentially, the banks have made most of their listings an auction. They take in multiple offers, then ask for highest and best from everyone. This takes a lot of time on everyone's part including the buyer. The better way for a rep such as yourself to work with the buyers is to take 3 days and close the bidding submitting only one offer to the bank that seems the highest and best. Tell your asset manager that you have other offers and will present if they would like to see all offers. Most asset managers that I am working with will look at up to 3 offers and select one of the 3. Tell buying agents that they are in multiple offer situations and upon the timeline close the bidding. Then you have every right to collect earnest money and deposit as needed.

Hi John,

Well, lots has been said here and I agree in large part with comments and frustration of most who are working with buyers in this situation. Your comment was that taking too much time to respond is a misconception, it sounds to me like you are an exception. That's not true for most of us, who rarely even get the courtsey of a returned call when following up on an offer after submission. I've seen comments in the agent listing remarks to the effect "Don't call us, we're too busy to take your calls, just submit your offer"

As far as depositing a buyer's check, and then receiving a counter offer? I think not, that ago goes against our CAR purchase agreement. I've never once ever has an offer accepted, short sale or REO without a stack of additional disclaimers along with the counter offer.

This is a great conversation, and something that has really been at the front of my attention these last few months, as the situation you describe happens over and over. I really like Broker Bryant's post as it exactly describes the conclusion I ended up coming to through trial (won't say error as luckily my Buyers did get into a house they love). Having him come out strongly in favor is pleasing as your post made me wonder if me doing what I thought was my job and my best for my clients could have been seen another way. Surprisingly, it was the listing agent who really let me in on the hurdles my Buyers were facing (this was back when it was still a new, changing process). He was knowledgable and informative and completely without any intent to take advantage of the process or deceive, while still representing his client... the Seller, not the bank. After a couple months of my very ready Buyers sitting back and waiting for a response as I directed them... after all, that is the process, is it not? I kept calling the Seller's agent. He let me know several new offers had come in and that my Buyers had the option of putting in a higher bid if they wanted. After a heart to heart with my Buyers we decided to leave the offer on the table but look around for something else they could love. We closed on a fantastic home in a dream neighborhood two months later. It was not bank owned but the Seller took a hit they were willing to take in order to make the sale, so the 6 pricing was comparable. The short sale house was still on the market six months later but finally did close...at $20,000 higher than the highest my Buyers could have paid anyway.

So... why not spell it out? Either neither party is looking elsewhere or both parties have the right to do so, it should be one or the other. Just come to some agreement on which way it will be... then no one is deceived and no one is horribly surprised. How this could be done might be a subject for wiser real estate minds than mine, but there must be a way. I know the short sale addendum in our state now specifies either the Buyer is obligated to go through with the purchase (within a stated time period for the response of the bank) or not, you have to clearly state which it is to be.

John it never ceases to amaze me how some people try to beat or find a way around the system, no matter what the system is. I would not be surprised to see some of those buyers and their agents getting sued. Keep me informed about that.

I also, like your idea about the $25 charge for the out of town agents to pay in order to get the key1

TIM & SUSAN

The problem with your suggestion of 'Concrete Guidelines' is you are just asking for even more government intervention and further turning this great American Nation deeper into a 'Granny State'.

Certainly you can respect the fact that Wells Fargo and Bank of America (or any of the other lenders or investor who purchased the scrutinized mortgages) have the right to do business the same way Hometown Realty is allowed to do things differently than Keller Williams or Century 21. This is AMERICA and we are STILL a Free Enterprise economy.

Yes, the rules do change - but I am certainit is much deeper than a whim.

Lets just suppose you loaned me $100 and in return I allowed you to hang on to my 'widget' that had a current perceived value of $110. Time goes on and I can't pay you - for whatever reason, so I tell you to keep my widget.

So you go to sell the widget and instead of being worth the $110 or even the $100 you find out it is only worth $75. You take a day or two to think about it and the best offer you can then get is $50. Do you want the government telling you what you have to do toe recoup the most of your loss? probably not

Now short sales is a completely different topic - but again I believe it has more to do with being understaffed with an ever increasing workload in a department of an institution that very will may be out of business in the next few months. I believe it has more to do with motivation and work flow trying to prioritize than it does with devious plots to make every ones life miserable.

JEANIE

Glead you got a good seat - looking forward to your input before this is all over.

BRIAN

Thank you for bringing this important factor back into the conversation - The Deposit.

I agree by having the buyer actually surrender the check to the listing agent is a significant gesture of good faith. In California, the 'Mutual Release' really only has to do with Escrow. If it goes into a broker trust account when the offer is submitted but is never mutually accepted by both parties, then it is up to the broker to refund the deposit.

The issue is - submit a deposit and tell me you are serious about buying this home. With your deposit I feel comfortable submitting and recommending your offer to my seller - bank or anyone else for that matter.

And by the way, the Seller's agent I mentioned and I have kept in touch and often exchange good information on the changing market. Thank you everyone with a commitment to every day education!

ELIZABETH,

Based on your comments, I read the Code of Ethics (again) word for word this morning prior to answering the comments. I was hoping I could find something I could sink my teeth into (It did spark interest in other topics that will be future blog posts). The best I could come up with is:

Article 2
REALTORS^® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS^® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law. (Amended 1/00)

Unfortunately there is a loop hole here that anyone could drive a MAC Truck through.

I am very interested in your 'tip sheet' and any writings your company legal counsel has generated on the topic. I agree it is not a good faith gesture to submit offers on multiple properties.

KATHRYN

Not sure if you should say you are lucky or unfortunate. My guess is we havethis problem only because we have had such a high foreclosure rate in The Inland Empire.

If we don't take "control" of our buiness this is definitely where we are heading. Good post.

OPTIONS REALTY

You have articulated the flip side to my dilemma very well.

I am not trying to create a more difficult environment. Unlike traditional, or normal listings, the REO listings in my market will all be sold -so it is not a shot the seller is looking for. My job is to sell it as quickly as possible - first and foremost. I am not trying to interfere -I am looking to make certain that the buyers who are competing for homes are serious - if they want me to go to bat for them, then just do what they say they are doing and part of that is to deliver and tie up an earnest money deposit. Certainly this is a strong factor in considering any offer.

As far as the banks are concerned - as my clients, they are fully aware of the steps I am taking to sell their inventory that are often referred to as 'Assets' when in fact they are carried on their books as LIABILITIES.

DIANNE

Thanks for the hope that things calm down.

It is one thing to have multiple offers on the same property - let the best offer win and yes let the market establish the value. That is after all how real estate is valued - what will the market bear.

The problem is buyers and their agents writing multiple offers on multiple properties - often over inflating their value and then having the properties never go into contract, because they selected a different property.

What are they going to do if the home they selected does not appraise? Do they have the cash to come in with between appraised value and contract price - chances are NO! So then they EXPECT the seller to lower their price, as if it were their RIGHT or something.

John, sounds like a very frustrating situation. Here in our market, we have some foreclosures and short sales, but thankfully they do not dominate the market. I'm not entirely sure you have the legal right to demand earnest money with an offer. However, I don't know that for sure. Here in our area, it is customary to send a copy of the earnest money check and then to deliver it upon acceptance of contract and signatures. I'm gonna ask Lenn Harley to weigh in. I'd like to see what she has to say...

LINDA (#15)

There is no hostage situation here. If you want to submit an offer it is customary to submit the EMD. Now because of faxes and PDF's agents have gotten lazy, for the most part and rarely deliver offers to the listing agent - somehow we got the idea that a faxed copy of a check was sufficient. Well, I want to have the check in my hand - or at the very least show me a copy of the trust log that the check has been deposited into the bank for the exclusive purpose of purchasing this property - not a generic catch all check that is often dated 2 or 3 weeks prior to the contract date made out to ESCROW.

I'll tell you what - I won't hold your buyer hostage if you don't hold my sellers property hostage for a week while numerous man hours are being spent trying to make this deal happen for YOUR CLIENT.

If you take the time to read Broker Bryant's post that he references, you will notice he is talking EXCLUSIVELY about CASH DEALS and not 3.5% down FHA Buyers.

John: This may be a good technique to help you control your business. I question if it would truly allow you to bring the highest and best offer to the seller when the playing field has been narrowed by YOUR new rules. I completely agree with Broker Bryant. A buyer would never get into contract in my area if we did not write multiple offers and see what sticks.

ERIK, (#16)

Yes, we all understand that the BA has no responsibility to make mine or my clients life any easier (How do you think I will react the next time I receive an offer from an offending BA? Do you think they may have alienated themselves to this side of the table?)

As I discussed above, I do not believe the banks have delibertly created any of this. I have been orking with them since 2006 and know first hand of their frustration as the market has continued to evolve and shatter.

I can understand that BA may be trying to 're-establish the equalibrium' but they must know that for every action their is an opposite reaction.

DENISE (#17)

Your response is indeed a great post all on it's own. Please write it and let me see what else you ave to say. You mention it is "ot allowed by law". I'd love to see what reference you can quote for us on this topic.

You mentioned the response time by the banks. Well, in California we have the right to add an expiration of our offer - the default is 72 hours - but we can make it what we want. Typically I will give the bank no more than 5 days to counter, when I represent the buyer. Rarely does it ever take that time. So, let your offer expire then go write another one.

The biggest problem I have with your answer is that you can justify your feelings because the seller is "the bank'. Why does this matter? Have the banks not been hurt greater than any other institution in our current financial mess. The buyer is looking to capitalize on the misfortunes of others - from the prior owner to the lending institution that ended up with the note - and both of those parties have gotten slaughtered. Yes they buyers may have more emotions and have pretties smiles and may even cry after a dozen offers are rejected - but excuse me - they are attempting to CAPITALIZE on the market. They FEEL ENTITLED to the $8,000 tax credit - as if it is their God Given Right and they often DEMAND to be able to buy a home.

Well, I don't see it that way. yes I am a champion for my buyers, don't get me wrong - but I really do understand the plight of the faceless banks - these guys have really taken a hard hit. I guess I just get bent out of shape when people are over bearing when it comes to what they are ENTITLED TO - last I heard it was the RIGHT TO Life, Liberty and the Pursuit of Happiness. Well if we keep providing entitlements to the masses we wont be able to pursue anything - we will be a true socialist state - and I for one much rather prefer the free enterprise of a democracy.

OK, let me get off my soapbox for ahile.

GREATER MORTGAGE SOLUTIONS (#18)

Thanks, nice to have a friendly face in my corner. Not agreeing that it is bad apples in our industry. I actually believe that most have been weeded out. I actually ordered a pizza a couple of nights ago and had a REALTOR deliver it. We spoke for a few minutes and I was told that they would not be renewing their annual dues in January. We have others in our market working the appliance sales at Sears - so the cream rises and the rest delivers pizza.

John - Lets add another twist to the scenario.

We are seeing REO Agents cater to the CASH buyers when they have had a severe fall-out of ratified contracts in a month. If the banks/Asset Companies are behind in their payments to the REO Agent this causes a CASH FLOW crunch for them. Making it difficult to clean out houses , change over utilities etc. They even go as far as to include comments of Conventional or CASH only in the remarks because they or the Banks/Asset Companies don't want to wait for an FHA loan to settle.So what chance then does a AS YOU PUT IT "wanna be buyer" have of winning a bid on that property.

The Buyer must use the Banks/ Mortgage Companies loan officer to have their contract reviewed /uploaded to the Asset Manager by the Listing Agent. If the buyer does not comply their contract is "FILED"

So why do you as an REO agent have the right to place rules on any Buyer Agent who represents the buyer on how to "Play the Game". Turn about is Fair-play in my book. If the Banks/Asset Companies and their Listing Agents would respond in a timely manner and not shop the Buyers contract this would not be an issue. If you know this practice is occurring pick a primary contract and then pick another one as a back-up offer that would give you better odds of settling.

Putting ultimatiums on your Listings and how to get them SOLD seems like a loose- loose situation to me and may cause your Listings to be avoided by Buyers Agents because they do not want to deal with all of your self imposed Rules & Regulations.

REMEMBER THE GOLDEN RULE:

It used to be that when a Buyers agent registered a contract if no other contract was registered that day , it was presented and the SELLER had three days to respond , COUNTER , ACCEPT or REJECT before they could even look at another contract. If multiples where registered the same day they all were presented at the same time. I have been sitting in another Broker's Lobby many times waiting for my turn to present an offer for my Buyer and wait for the Sellers decision.

If we could remember the basics of conducting a transaction, the Real Estate Market may return back to normal a little faster.

John,

In Florida, you are not required to give earnest money with an offer. It makes the offer stronger, however, it is not required by Florida law.

I personally, will only write one offer at a time per customer unless they are interested in purchasing more than one property.

I second Sybils comments.

Mentone Cabins Realty (#19)

Short sales are atotally differnt animal and not really what we are talking about here - but thanks for stopping by

John, I have enjoyed reading all the responses and the differences of opinion on this topic. Great topic of discussion. I will be checking in later to see how they weigh in. Have a great Sunday.

Hi John - It all comes down to which side of the transaction we represent. While a seller may lose marketing time when a buyer backs out during their due diligence period, a buyer loses valuable buying time when the seller is slow in responding or significantly changes the offer with an addendum that heavily favors the bank. And with the expiration of the First Time Home Buyer Tax Credit looming, that lost buying time can be crucial.

John - You realize that once you counter the purchase offer and/or provide addendums, you have no contract at that point and if you asked for an earnest deposit, it will need to be immediately returned. That is why we can make multiple offers on REOs because we know you will either counter our offer and/or give us an addendum. If you don't, we have at least 7 contingencies to use to walk away from the transaction.

Disclaimer: John and I are in the same state. Your state laws may differ.

John:

I have been an REO listing agent in the past. I am not one here in Texas where I have practiced for over a year. This is a very interesting post and very thought provoking.

John:

I like your decision to make an out-of-area agent come to your office and get a key and pay a deposit. Many agents know the preferred codes of the banks and just helped themselves to a showing without checking in with the agent. That would also stop the agents who were free with giving out the codes and never actually showing the property to their buyers.

John: You seem like a nice guy, and at least I DO understand that REO properties are not short sales. But please don't try to generate sympathy for your bank/REO clients! Every single REO seller I've dealt with has been slow and difficult and played the "offer game" as well. I sell HUD-foreclosed houses, too, and they allow -- even encourage -- buyers to bid on multiple properties. When I work for buyers, I only care about what's best for them. If I worry about your seller, I am going against the REALTOR(r) code of ethics and our state commission's guidelines. My goal is to get them into a house that works for them at the best possible terms.

And another thing: The banks have been hurt by the fallout of the mess they helped create by playing Russian roulette with questionable financial products.

John, I certainly understand your position as I recently had multiple offers on one of my listings and the first accepted offer buyer went with another property they were accepted on. I went through the next three offers and guess what? All had presented offers on other properties and were accepted.

Long story short I sold the property again and two of the original offerers came back asking if they could resubmit. Ugggg nope. It's sold.

Just another aspect of todays market.

TINA

Banks are not taking very long here - at least not the ones in my market.

The scenario that unfolded and pushed me to write this post unfolded like this...

First, the 3rd countered offer in as many weeks informed us that they were not going through with the transaction.

Within an hour, I had a call from a buyers agent, who had just submitted na offer. We discussed what has been going on and I shared with her how to structure her offer so that it would meet what the bank had been asking for.

Let me share, that this is one of the properties the prompted me to write REO LISTING AGENT OFFERS INSIDE SCOOP ON "HOW TO WRITE AN OFFER FOR A HEMET - SAN JACINTO CA BANK OWNED HOME FOR SALE". Offers had come in up to $180K for a $150K listing. All the bank wanted was for the $150K to be strong.

So, the buyer adjusted their offer, lowering the offer price and swallowing some of the concessions - the buyer was strong with over $60K in cash reserves - that I personally verified. The adjusted offer was received by noon on Friday and promptly submitted to my Asset Manager who tried diligently to issue the counter offer that afternoon - but needed management review before releasing the counter/addendum's. By 9:00 a,m, Monday morning I had the counter and by 9:10 the BA had the same.

We did not get word until Wednesday afternoon that the buyer had accepted another offer on another home.

There was no game playing and no dragging of feet on behalf of the seller - we acted promptly and decisively.

What had been a problem, until 5 or 6 months ago, was the seller providing the buyer with signed copies of the fully executed agreement so the buyer could get their loan moving along. It has been a long time since I have seen that.

I for one don't play games - when offers come in they are reviewed by me, calls are made and my staff process the offers. We don't have time to sit and play games. My asset managers will either get back to me, typically, the same day if I submit early enough or the next business day - 9 times out of 10. In the last 3 months I can only recall 1 offer that was not processed right away that I go into detail in comment #25 above.

So all this talk about the banks dragging their feet has more to do with Short Salesand NOT REO's. I understand the frustration - I was lucky enough to get in and out of Short Sales before 95% of the agents even knew what they were.

As far as pushing my asset managers - I do it all the time. They are thankful for it - they push me and I push back. Together we get the job done. Believe me, If I call or email with any question or concern and I don't hear back the same day, the next day they will hear fro my twice and the day after that they can expect to hear from me three times...and on it goes until I get an answer - after all we all understand the basic principal that time is of the essence.

So although most of the comments here have been telling the seller to do a better job, I have to defend them. Yes, my team and I represent many buyers - so I too am definitely frustrated by not having offers accepted and having to compete in a multiple offer situation - but my team and I will not write offers on multiple offers simultaneously (other than short sales). I believe the problem is still buyers sense of entitlement and tired agents doing whatever it takes.

John, we don't have the frenzy that you have, but I must agree with you: delayed response from asset companies are not the problem- they've responded within an hour on some occasions with a preliminary acceptance. The buyers that end up waiting are those BEHIND the intial accepted offer- 1st buyer receives the "as is", and while their lawyers (NY) ruminate and argue about changes that will not occur, the Realtors with buyers in positions 2 and 3 wait (with a decent shot at acceptance, due to problems created by the buying side of buyer #1)...I wouldn't be the least bit opposed to asset companies requiring a signed "as is" addendum PRIOR to considering an offer- it might mitigate the horrible wait that equally good (and sometimes better) offers find themselves in. Asset companies want closed properties, and I have yet (again, limited experience relative to your own) to see one boot out a strong accepted/completed offer in favor of another, but that's what buyers have to sign, so the confusion continues...buyers sign one thing, but the experience is just not as "reckless" as the "as is" permits. Maybe we've just been lucky so far.

DOUG (#24)

I believe I have covered these points.

In my most recent comment (#57) I cover in detail about the banks time line - if you feel the need, make your offer expire on a set date and time - then anything after that is fair game.

As far as the $8,000 Tax credit - well it is a good thing for the market - but no one should feel as if they are ENTITLED to it. I got on my soap box about this in #45 above.

As far as the banks streamlining - maybe if they were a official government agency they could all have one set of guidelines and then maybe if all real estate agents worked for one national agency we could all do everything exactly the same as well. Hello, this is AMERICA and this is the FREE ENTERPRISE SYSTEM at work -OK, there are flaws, but you can't think for a moment that all banks should do everything exactly the same - we are not a SOCIALIST GOVERNMENT so please quit talking like one...or we may just become that

Quick, off my soap box...

JAY (#28)

When I get an offer - I process it. I stay on top of the seller and generally in less than 48 hours the buyer has a counter offer and addendums - more often than not it is in less tha 1 business day.

"but my team and I will not write offers on multiple offers simultaneously (other than short sales)."

Well John, what's good for the goose is good for the gander!

LYNDA - (#29)

OK, I can speak on behalf of my client's - the banks and asset mangers. What I cannot speak for is other listing agents and what games they may or may not be playing.

Bear in mind, I speak with every BA who submits an offer to me - usually I initiate the call. Most Mondays are spent on the phone tracking down BA's (you'd be surprised how hard they are to track down - many have to wait and call back when they are done with their 'day job' and expect me to work into the evening in order to accommodate their schedule.)

OK, I just checked the CAR Residential Purchase Agreement (RPA) and it does say that the check shall be held uncashed until acceptance - it can be delivered to the Listing Agent though and not held hostage by the BA.

LENN'S RESPONSE. You asked, I responding.

Do Buyers Think They are Getting Slick?

Do Banks Think They are Getting Slick?

What "fraud"??? That's a serious accusation. One not to be tossed around lightly. I cannot find any bar to multiple offers in the license law in the two states in which I am licensed.

The frustration for many wanna be home buyers escalates week after week as their agent takes them out for a tour of new homes on the market followed by an hour or more of paperwork and several days before finding out that the home they wanted to buy has been sold to another buyer.

The cure for multiple offers by home buyers seeking a contract on bank owned properties is for the banks to respond to the offers with a counter-offer, acceptance or rejection timely. Timely is the normal time in which most contract offers are "turned around" by agent managed contract, 1-2 days.

THE MULTIPLE OFFERS BUYER

Whether it is buyers instructing their agents or agents suggesting to their buyers is unclear; but buyers are now writing offers on multiple properties at the same time. In essence, they are treating our industry like a pile of SH*T - thinking they can throw enough of it against the wall to see what sticks.

Buyers making offers on one listing at a time are seriously disadvantaged in a fast moving market by the dilatory manner in which their offers are processed.

My personal frustration comes from one of my active bank owned REO listings that has had 4 offers accepted by my asset manager only to have the buyers turn not sign the counter offers and addendum's - because they bought another home.

How long did the acceptance take?? If it was more than 72 hours, it was too long. Buyers have lives to live, jobs to go to, families to care for, finances to keep current, planning to do. Waiting for a interminable amount is what drives them to make more than one offer. Consumers do not respond well when treated the way the banks treat them. They do not know our business and do not understand the likelihood of their offer being accpeted even when their agent tries to tell them that the bank caused delay is normal for bank owned properties. They can rarely deal with it since it makes no sense.

So the thinking is if you write 10 offers and one comes through, great, you got a new home. If two offers are accepted - even better you have a choice. When three offers are countered then buyers are feeling like they are in control.

HOMEY DON'T PLAY THAT GAME

OK. I may be dating myself to the 80's variety show that launched the Wayan Brothers and Jim Carry - In Living Color. That's OK, it just lets you know I'm old enough to have gone around the block myself once or twice and I am not going to be a participant in your games.

So how do I stop you, you want to know. That's easy - If you want to play you are going to have to pay.

Multiple offers can be stopped by the banks treating home buyers with some respect and cease their dictatorial and illogical processes, or lack thereof.

Here is the new rules:

One, If you are an out of town agent and you don't have access to my electronic lock boxes then you are going to have to come to my office and pick up a key - leaving a $25 key deposit.

That certainly makes sense. Anything less isn't fair to local agents who play by the rules.

Two, if you want to submit an offer I will only process it once I have your clients earnest money deposit and yes I will deposit it directly into the trust account on the day it is received. If you are not accepted your money will be refunded right away. If you have opened escrow on another home then we will have to figure out what steps to take to see if you are or not entitled to a refund of your deposit. I'm sure it will take at least a week or two to have my attorney review the situation and offer me the proper legal advise...something I would strongly suggest any agent who willingly plays this game to get. I can't tell you where it is - but as one professional to another, we both know this is not the way we are expected to treat one another or the public - and yes my corporate / bank seller is still the public. Lets not forget who is taking the bath here - not your client with the sense of entitlement.

In my market license law states that earnest money is deposited no more than seven business days following contract acceptance.

In my market license law states that earnest money is deposited no more than seven business days following contract acceptance.

So go ahead. And "Make My Day". For those who are too young to remember that was a very famous Clint Eastwood line form one of the Dirty Harry Movies.

Awe Shucks. This is to easy. MAKE MY DAY and violate license law in my state.

UPDATE - The Morning After

OK, I am a little blown away with the responses I have received and was really blown away when I realized this blog post was Featured by ActiveRain. I know there will be a lot more than the 15 or so comments I have already, by the time this day is done. My last Featured Blog Article, The Next Wave of Bad Loans - Option Arms, currently has 115 comments - none of which I replied to. In part because I did not want to influence the conversation and in part because I was over whelmed. I did not allocate the time necessary to get back to everyone. Well, my commitment - at least for today - is to answer everyone's comment and engage in the conversation - so please leave your comments and lets discuss this through.

I'm not committing fraud and neither is my buyer client. If you believe that multiple offers are fraudulent, give me a legal citation or interpretation.

I realize that bank owned properties are not as bad to process as short sales, but they could also be a lot better than they are. Many banks still take 14-45 days to respond to an offer. Our offers which contact a pre-approval letter, a buyer's financial statement and full completed contract could easily be processed in 2-3 days. Fact is, unless the bank is taking one offer, which they never say, the bank may be juggling 3-6-12 offers and may take weeks to respond to any. IS THAT FAIR???? Mmmmm. It is the banks that created the atmosphere that enourages buyers to submit multiple offers.

BTW, I've been writing multiple offers for my buyer clients for 20 years. When I represent an out of town buyer who is only going to be in town for a few days, my buyers prioritizes their offers, 1, 2, 3, etc. Never went over 6. I write the offers and submit one each day until the counters begin. We review everything and move swiftly until one is accepted by the parties and I immediately fax and e-mail a withdrawal notice from my client's file so the listing agent and seller have notice as quickly as possible.

This is an excellent and timely discussion and needs more juice. I'm also going to reBlog it. Loosen up those fingers.

Ooops. No ReBlog button. Oh well.

John,

May I ask are these terms that your seller has asked you to make when considering offers or are these yours?

"One, If you are an out of town agent and you don't have access to my electronic lock boxes then you are going to have to come to my office and pick up a key - leaving a $25 key deposit.

Two, if you want to submit an offer I will only process it once I have your clients earnest money deposit and yes I will deposit it directly into the trust account on the day it is received. If you are not accepted your money will be refunded right away. If you have opened escrow on another home then we will have to figure out what steps to take to see if you are or not entitled to a refund of your deposit. I'm sure it will take at least a week or two to have my attorney review the situation and offer me the proper legal advise...something I would strongly suggest any agent who willingly plays this game to get."

If they are yours, I'd say that's a bit unethical since your suppose to be representing your seller(s) and presenting all offers. Not to mention that part of your services included marketing the property and allowing access for potential buyers with or without a deposit. As for rules regarding earnest money and making multiple offers, the rules that govern make the rules, not you or me.

Sounds like your seller(s) business model could be to blame for your uneasiness, b/c if they actually treated their offers with the respect they might get a bit more.

Good Luck!

EDY (#30)

First let me point out that when you read BB Comments (#4) that he clearly references a prior post of his where he is clearly addressing CASH OFFERS

Like your listing agent, I do like to spend time on the phone and share my thoughts and opinions to other agents who will listen. This is how we all grow - through constructive 2-way conversation - similar to this blog thread.

If someone is willing to engage me, I will often share how I think they can structure their offer to be in a position of strength - and that does not necessarily mean the highest price. Of course, I don't disclose details of other offers - that would be unethical. But I do take time and I have established strong relationships with BA who have now completed multiple and even numerous transactions with me over the past 2 or 3 years that I have been selling homes for the banks.

I agree that communication is paramount to any successful real estate transaction - so I never take the attitude that my staff or I are too busy to talk with a buyers agent.

If you read above - I have covered my procedures for accepting offers, processing them and working with buyers to close escrows - which is after all the goal. You may want to read REO LISTING AGENT OFFERS INSIDE SCOOP ON "HOW TO WRITE AN OFFER FOR A HEMET - SAN JACINTO CA BANK OWNED HOME FOR SALE"

SYBIL (#31)

You are right - there are always going to be thos who want to game the system - no matter what the system is.

Funny, but you are the first person to mention the key deposit. In my isolated market we use the SentriLock electronic lockbox - all of the surrounding markets have something different. Well, I have to pay close to $100 a pice for my lock boxes - they are not leased. My clients give me very specif instructions to not allow me to give out manual lock box combos. so, if they can't get in with a local key - then make an appointment to to pick one up. My office is conveniently located and right next to a Starbucks, so it is very easy to find.

EDY (#35)

Commitment to Every Day Education - I like it. Can I use that?

ROBERT (#38)

You are right we need to be in control - regardless of what side we represent - and when the other side tries to take the control away, we will do what it takes (legally and ethically, of course) to gain our edge.

BOB (#41)

Thanks to some of the other posts above I ahve done a little more research and determined that I CANNOT deposit an EMD until the offer is accepted - however, I can still hold the check.

Thanks,

KATHLEEN (#43)

The truth is as I discussed somewhere above - and I know it is in my sister post, REO LISTING AGENT OFFERS INSIDE SCOOP ON "HOW TO WRITE AN OFFER FOR A HEMET - SAN JACINTO CA BANK OWNED HOME FOR SALE" the banks are not necessarily looking for highest and best. They have been caught too many times accepting very high offers and only having to renegotiate the purchase price based on the appraisal.

Today, they set the price, at the very top of the makket and let the market come to the listing - they don't care if it sits on the MLS for a few weeks. I think the days of multiple offers on the day it hits the MLS is coming to an end.

Hi John - Here is the Florida market, when offers are submitted by our agents they include timelines...life and death clauses...it covers when to move on to the next offer. Most listing agents do not know the turn around time for sellers acknowledgement of the offer. You do hear 24, 48, 72 hour turn arounds. However, when the listing agents are receiving 10 or more offers on the same properties we do not know how the asset managers finally make their decision.

We're on our 5th offer in the last 60 days to REO and approved short sale decision makers. After the expiration for the time of acceptance, we received an executed contract from the seller and the 10 day approval for the short sale division has come and gone with no verbal or email communication from any of the parties. Limbo does not close a transaction. No one returns your calls nor do they reply to your email communications.

In another instance, an offer was submitted to the REO manager who told me we were the only offer being considered. He asked for proof of funds which we emailed directly. The following day he contacted us to say there are now multiple offers and they are now asking all the buyer to give the highest they are willing to pay. By the way we offered more than the asking price and what the threshold the buyer is approved to purchase with a mortgage.

Many of these homes have been vacant more than two years in the hot south Florida sun and need more than cosmetics to be habitable.

The deposit comes 24 hours after the person executing the contract on behalf of the seller who has the authority to bind the parties appears. In our State all parties have to sign a release to give the deposit monies back. Should there be a lag time, the buyers are not in a position to move on to the next submission.

Challenging issues likes those mentioned above do not incorporate how much extra time and energy has to be expended by the agents and buyers to locate another home they would consider purchasing and writing up all this paper and communicating with all the parties. hence we are working longer and harder for less and less money.

I also came across a new twist...the REO submission forms have to filled in by you along with the contract. It is there check list to process the file...Information includes loan to value ratio...and they tell you they only accept email communication, do not call them and if you do not hear from them consider the offer rejected...they do not say what the turn around time will be either.

Get ready the commercial markets are next and we haven't even seen the end of the residential debacle.

LAURA (#27)

OK, Lets Twist...

(Sorry, but I had to lighten this up and have some fun...I can't believe this is all I've done all day since 8:00 a.m.)

Agreed - CASH IS KING!

As far as Cash flow, my clients are good tome and get my reimbursable expenses out quickly. It is not uncommon to have $1,000 out per listing - sop an inventory of 25 properties can get expensive. It was tough when I first started - fortunately I have built enough cash reserves to keep everything moving the way it should be - so my own cash is not an issue.

None of my banks require that their loan officers get involved in the transaction. I personally take it on myself to call loan officers to gage how tight the offers actually are.

My rules are to protect my client - the Seller. Again, I want to emphasise in my personal situation respondiong in a timely manner is NEVER an issue. My Team name is EXCELLENCE IN REAL ESTATE and Excellence is not just a word - it is how we do business and that means effective communication!

My sellers will not entertain any other offers once they generate a counter offer. I know, I have tried getting my own buyer in play as we wait for the addendum's to come back from another previously accepted/countered offer. They really only want to sell the home and not play games. what everyone really needs to consider is that we are dealing with individuals who typically have less than a year on the job in a department that was almost non-existent 2 years ago for an institution that very well may be out of business or seized by the government by this time next year. They are not playing games - they are over worked and stressed - just like you and me.

I am not worried about my listings being avoided - there are way more buyers than listings today. Personally, I would prefer all of the other agents to keep away from my listings and let me sell them myself. I know how to market and makes the phone ring. I have a team of seasoned buyers agents - and more who want to join me. I can sell my own listings - but when I do that, it's not fair either.

The 'self imposed rules and regulations', as you put it are to protect MY CLIENT - THE SELLER To make sure that we are not waisting time and that they can get these properties off their books as quickly as possible. Realize that for every offer that is countered by the bank that a week is eaten up from the time the offer is originally reviewed to the time the counter is prepared and presented to the time the buyer finally tells us no thanks. Not a counter or good faith negotiation - they just walk away. So, how did the buyer prepare an offer "In Good Faith" when they have offers out on multiple properties?

As far as your Golden Rule - well that is how things 'roll' in the office of the Excellence in Real Estate Team at Allison James Estates & Homes! Thanks for your comments.

KAREN (#48)

There is no law here in California requiring a deposit check be given to the sellers agent - butthat is what I am looiking for - a stron offer. In my sister post, REO LISTING AGENT OFFERS INSIDE SCOOP ON "HOW TO WRITE I go into detail about how much influence the Listing Agent has in packaging offers that are submitted to the bank.

Thanks for thw words of support.

JEAN (#50)

Thanks for stopping by - this will be a great conversation for our next team meeting - let me know what you think when you are done - and please ask Art to take a look, too.

JOHN (#51)

First off as much as I understand the tax credit is near expiration - but I do not believe it is an ENTITLEMENT. I believe they (buyers) are looking to turn a lemon economy and housing market into their own personal windfall lemonade. Power to them - but that is not grounds to be unethical and fraudulent - possibly breaching the very principals of contract law - but hey, I am no attorney here.

As far as the seller moving - again, I have pointed out numerous times above that the sellers I work with move rather quickly - copnsidering the stress they are under.

So ethics and contract law apply equally to both sides - regardless of what sid of the transaction you are on.

AMIRI (#52)

ohhh, Amiri - af all the comments I have spent the day responding to this one make my blood boil.

I may only have 5 years real estate experience - but I started selling door to door as a kid back in the mid 60's. I know how to sell and I know how to close. I also know that there are numerous avenues that will get you to a close.

Prior to selling real estate I was a sales manager for a national home improvement (windows) company. There were many great reasons to buy our reputable product. Of course, not every contract that was signed was fulfilled because we have a 3 day right of rescission to cancel a contract that we sign in our homes.

When I sold and my top salespeople sold, we never made this an issue. We explained it as a right, when we did the paper work. Most of us who sold this way hardly ever had a rescission. Now, the weaker salespeople would consistently use the rescission as a way to get a signature on a contract -so a few minutes of ego building pleasure. Only to be totally deflated the next day when the rescission beat them into the office with their contract.

My point is anyone who sells based on the strength of 7 contingencies to walk away is WEAK and UNPROFESSIONAL.

Yes, I have been around long enough to know that we don't have a binding contract until both parties have signed all documents pertaining to the transaction.

This however does not give you the right to write multiple offers and have them out at the same time - unless you are planning to move forward with each contract that is accepted. I believe that you are acting in bad faith when you submit offers on more than one property without waiting to find out the disposition.

Buying a home has always been a time consuming process. This is why we have periods of due diffigence - your approach is circumventing the entire process and principals of contract law.

Making multiple offers is the least of my problems! The REO agents here in CA are asking for each buyer to be approved or pre-qualified by their lender but they make it so hard to get a hold of the mortgage rep that it can take days to get the required documentation. I had one last weekend that wouldn't talk to my buyer because she said she worked for a bank and would not need to receive a loan from them but just needed a letter to submit with the offer as instructed by the listing agent. With the banks taking so long to respond the buyer is often hurt on his FICO score because of all these requests.

I also had a verbal acceptance and then the next day was asked for our highest and best offer! These banks are playing all sorts of games and the poor buyers are just lost.

I have been a REALTOR for 29 years and I never have seen the lack of professionalism that is out there today. The agents are not answering their phones and won't return emails. I have one offer that I don't even know if they received it!!! All I am asking for is a phone call or email. Of course all offers had to be emailed and the REO agent is a single man office so I can't drop by the office to check things out and of course he's out of area which is another great thing banks are doing with their REO listings.

I have no problems writting and presenting offers on multiple properties for my buyers. I did this when we had a very hot sellers' market, and offers were being submitted to the sellers in multiples . . . only to have our offer wait and wait, and then 48 hours later, to find out our offer wasn't accepted, or countered.

So if we played by your rules, my buyers would sit and wait while your sellers sat on their behinds and cherry picked . . . and in that 48 hours, my buyers are NOT putting out offers?? HUH?? Why not?

Earnest money is not deposited, in my local pratice unless there is mutual acceptance of the offer. And then it's a 72-hour afterthought.

I always put my clients' best interest forward, and promote their best interests. If that's submitting offers on properties that the banks are using to play (bidding) war, then my clients offer is being used to the sellers' advantage. How is that ethical?

Great Debate you have going on here John!

I want to preface this with I did dabble in REO listings and I hated it. I do have MUCH respect for an REO list agent but unfortunately the respect isn't reciprocal. It isn't reciprocal because many of the REO playahs in my market have 8-10 dollar an hour gatekeepers who are rude as hell and it is impossible to get even an acknowledgement of the offer receipt.

I DO GET IT, like I said, I played on the other side and understand that MANY MANY buyers agents are rude as hell just to get their offer accepted and I DO understand the dirty games that are played.

MY problem is that I just want acknowledgement. My system is that I fax the offer (some list agents have antiquated faxes and it can take upwards to 45 minutes to fax an entire offer.) I THEN scan the documents and shoot them over via a polite email and just let them know I already faxed it but here they are scanned in case there was a problem with the transmission, please acknowledge receipt (via email is fine) and if you need anything further I am here to get it to you as soon as practicable.

I don't harrass, I don't call names, I won't even give the REO lister (or their assistant) a sense that I am frustrated. I don't call multiple times in a 24 hour period. If I do not receive an acknowledgement, I call every 24 hours and follow up with an email (wash, rinse and repeat.)

Here is the argument, you are frustrated and treated like crap because we are frustrated from being treated like crap. I am not saying John Occhi is a crappy REO list agent (there are a couple of good ones in our market that I love love love) and I am not stating that every buyer's agent "get's it" like Renee Burrows. I am stating that this whole process SUCKS and there are more dirty players in the market than there are good.

What we need to reform this process would be to make REO listers more like transactional brokers (MLS FLAT FEE-ERS, you guys don't get paid enough to put up with the garbage anyhow) and make the system more like O*wen's auction system. It would be great for us to upload the docs per the servicing company's requirements DIRECTLY to a servicing company's website to prove that our clients can close rather than play the loophole games that the list agents put us through to set us up for failure.

Like I said, I know what is required and what is not required. Problem is, so many agents make up their own games ON TOP of servicing company's games that they may not be getting the "highest and best" they deserve. No better way to do it than through transparency.

Now, I WOULD NOT have a problem (might be one of the few buyer's agents here in the minority) with delivering a check (that won't be cashed) but I WOULD LOVE IT if there was a time frame set up where Mr John Occhi was there to receive it in person to thank us for the offer that we just wrote. I would also love for Mr John Occhi to hand deliver it back to me after rejection and so that I could personally thank him for doing a fabulous job as a list agent even though we "lost" this one.

Human contact, cats and dogs living in perfect harmony. Who wouda thunk?

"ohhh, Amiri - af all the comments I have spent the day responding to this one make my blood boil."

I've been told, even by an Activerain staff member, that I have that affect on people. ;)

Let me make myself very clear here. My comments are not personal. You seem like a nice guy and I am a nice guy too (at least I hope so!). So please don't take it personal at all. In fact, I share the same stance as your friend Bryant but with a twist, I don't think it matters if the buyer is a cash buyer or a financed buyer. The logic still applies in my opinion.

Ok, let me address your argument and see if you can see the logic behind why I think it is OK to make multiple offers on REOs:

"My point is anyone who sells based on the strength of 7 contingencies to walk away is WEAK and UNPROFESSIONAL."

My strength is on the fact that the bank (your client) will most likely either counter (usually with the multiple counter of highest and best) and/or give my client bank addendums (usually stating that they cancel this transaction at any time and are not liable for anything). Once the bank does this, they cancelled out my client's purchase offer. My client at that time can walk away if they want with no recourse. Let's assume that the bank doesn't counter or give any addendums and actually accepts my client's purchase offer, then my clients can walk away from this transaction, if need be, by using one of our contingencies. So, my strength is not in my contingencies, but knowing how your client will respond (if they even respond). The contingencies are just my client's emergency parachute if they need it.

"This however does not give you the right to write multiple offers and have them out at the same time - unless you are planning to move forward with each contract that is accepted. I believe that you are acting in bad faith when you submit offers on more than one property without waiting to find out the disposition."

My clients are acting in good faith. They really want to buy a home on their terms. It's not like we are bored one day and decided to look at your listing and write up an offer on it. We know that their contracts will not be accepted on face value and that your clients will most likely have a counter and/or addendum in place that might not be to the best interests of my clients.

Now here's a jab to you, not to make you upset, but to turn the logic around to help you see my point. You stated on your response to this blog the following: "...but my team and I will not write offers on multiple offers simultaneously (other than short sales)."

So are you acting in bad faith when you submit offers on more than one property without waiting to find out the disposition? Especially when there is a signed contract in place and the lender's approval is merely a contingency?

"Buying a home has always been a time consuming process. This is why we have periods of due diffigence - your approach is circumventing the entire process and principals of contract law."

I am only in this position because of your client's approach to our process. So what am I really doing? I'm doing the same thing that your client is doing. I am using real estate contract laws to my client's favor and beating your client at their own game. Nothing more or less. Just working the system that your client established.

Again, not a personal attack. I hope my comments help you understand why we make multiple offers. I encourage an open and honest debate and appreciate your comments.

Thank you!

John - I personally disagree with you on the buyer strategy of writing multiple offers. This is not new and happened in the early 90's as well. With banks trying to control where title is completed (which is the buyer's choice and technically illegal for the seller to mandate) to buying properties as-is with every waiver under the sun, I don't think it is unethical for buyers to write contracts on multiple properties as long as it is disclosed.

Yes I agree i think I should advise my clients to make only one offer on a reo then to wait around for a month to see if it's accepted. Lol the more restrictions you put on making an offer the fewer offers you're going get.

I routinly make offers on multiple properties for my clients. As long as you and your sellers are soliciting multiple bids
and playing the highest and best game,
and taking days to respond
and favoring the cash offer over financing....

turn about is fair play. We dont give up a good faith deposit untill written acceptance. (we will provide proof of funds or a copy of a certified check with the offer, but not real money) We use the inspection clause in our Florida contract or refuse to sign the banks addendums to avoid to possibility of a contractual obligation to buy several properties

The reo sellers and their agents (you) have only yourselves to blame...There is nothing wrong with what we buyers are doing

Having read the various comments here and giving it a little thought as i walked the dogsI had another thought.......actually I have formulated a new strategy. i cant wait to try it out

I plan to make offers on multiple properties; sight unseen. If its in the right neighborhood, and the pictures look ok we will make an offer. That way my client and I will only have to visit the properties after an offer is accepted.

John: I did enjoy reading this post, but do not have the time to dedicate to reading the conversation in the comments (sorry). I love your "Homey" section, because buyers and their agents are getting a little "slick". In my office, we write really, really strong counter offers in order to weed out the smelly buyers.

John, your post has garnered an incredible stream of comments. Congrats on the Gold Star!

Seems like given the unknowns of a short sale, writing multiple offers is a good strategy for the patient buyer. It's of course important to make sure the buyer is pre-approved and has a CURRENT pre-approval letter. The days of a pre-qual are long behind us as far as i can tell.

I'm with Broker Bryant. I just had a contract go through on a property that had been on the market for months. We wrote a full price offer and gave them 2 days to accept... It took 4... The listing agent even said that the bank thought they might get another offer, so the delayed... They almost lost the sale.

This was the 4th house these buyers put an offer on. We were under contract for 4 months on a short, they had already sold their other home and were living in a hotel... Never did get an answer from the bank on the shorty...

The bottom line is that if the bank can accept multiple offers, then the buyers should be able to submit. And you CAN short circiut this issue if you actually accept offers instead of countering with the BS addendum. Try giving people the addendums up front... then the bank could accept offers instead of countering. We can choose not to accept a counter, but if an offer is accepted without change, the buyer has few opportunities to jump out.

I dont know about depositing the earnest money before the offer is accepted. I am running into a lot of multiple offers and it is hard get one through so I would hope people arent buying two houses at once.

Okay, I really have enjoyed this debate - I have to say that I would restate this, but I won't, because Renae #79 said exactly what I would have said.

It's frustrating all around.

IT seems to me John, that maybe you are the Ideal REO agent, and that the rest, which us realtors have had to deal with, have been less than stellar, to be kind.

The banks are supposed to be the experts. Name me one major bank that was not in the business when the last market correction occured. Are we to believe that this is the first time that a major corporation has had to deal with bad mortgages, Short Sales, BPO's & REOS

I do not think so. The entire reason that so many have a bad taste in their mouth is because banks have dragged their feet as the market changed. Yet these are the same dill weeds who sell products based on their assessment of the market. Individuals Come and Go. Corporations have a long memory. I have no pity or sorrow for Corporations that are hemorrhaging cash as a result of being unprepared for this carnage. they emply the experts in these fields. They have experience in these fields.

Teh fault lays solely on their own doorsteps, and i have no sympathy for them at all

SEP

The whole multiple offer mentality by buyers has been brought about because the banks are behaving as they are -- taking forever - insisting on crazy clauses and such -- so the buyers are taking back some control. We agents may not like it -- but it is the banks fault. our 2 cents.

John, for what it is worth here, our REO agents usually get back to us in 24 hours. They are in communication with the bank they are representing.

Now once we have a verbal we are good to go. It takes a few days to sign all the documents from them, because many times it has to go to the asset manager.

Short Sales are a totally different situation, they take forever and may or may not happen.

John - I can see you're busy here, just wanted to pop in and say congrats on the featured post, and I Digg the new photo. No need to reply or respond, it's clear you have your hands full with this post. Have a great week my friend. :-)

I feel the same John, if your buyers aren't going to be there and be committed to the beginning, how can a buyer agent expect them to be there at closing?

I have a buyer in Tahoe who is looking to sell his property in another area, an honest to goodness live body who will respond to offers in a timely manner. He has been subjected to this same situation, the first 3 buyers who offered in the first week all backed out. Frustrating for sure. I'm sure it's been frustrating for buyers in this market too. But I'm with Broker Bryant, if you're going to do the multiple offer thing, do it on distressed properties....

I normally don't advise multiple offers on REOs,, though I do on short sales. But it's taking longer to get responses, and I suspect some of that is the fault of the agent. So here's my new rules: No picture = no show. Agent is either too lazy or too overworked (has taken more listings than he should) to do a good job.

Hi, Just a Canadian perspective here - Because we do not have short sales to speak of here, most offers are dealt with with a sense of urgency. Most offers can be addressed and accepted in one or two days.

We do have a small percentage of "Power of Sale" properties which are similar to Foreclosures. Because you have to deal with the lending institution it can take up to 48 hours to have an answer.

I can see where buyers in the U.S can become frustrated while waiting for a response to their offer. If they continue to look (which they shouldn't if they have offered on one house) I suppose it is possible they may find a better property and get cold feet towards the first offer.

Now IMHO if those bank people or asset managers or whoever the people are who entertain your offers on the short sales and foreclosures were in fact REALTORS, you could bet your bottom dollar the deals would get done a LOT faster.

Are those people licensed REALTORS? I think when the banks get out of the real estate business it will be a much happier environment.

One more thing. O.K. I just wanted to be comment number 100.

Deposits are only given here once the offer has been accepted. At that point it must be deposited into the Listing Brokerage's trust account within 24 hours.

John,

With all due respect, everything is your three paragraphs in the "Here is the new rules:", I would only say to you, good luck in trying that, and don't be surprised if your business slowly slacks off with the attitude you are proposing. I know you're aggravated, but there are always two sides to every debate. Trying on purpose to not refund a deposit like you propose is getting into murky waters I would think.

You don't want to make it difficult for people to do business with you, and you are with your "new rules".

Good luck to you. It's can't be all bad out there.

Laura's comments about Realtor ethics are great. Realtors who urge their clients to write multiple bids are not only looking out only for their own best interests, but are clogging up the system.

In MA, we require a deposit to be made with every offer. Except I do it with a twist. I insist that the deposit check be issued in the form of a certified check. This accomplishes two things: a) I know that the funds are "good" and b) it physically takes the funds out of the buyer's bank account, so they are less likely to make multiple offers if they realize that it is going to cost them $500-$1,000 for each offer that they write. I won't deposit the cashier's check into escrow until the offer has been accepted by the asset manager, and if the offer isn't accepted, they will get the cashiers check back to re deposit.

A co-worker just told me, upon submitting a complete offer package to Aurora, she was told not to call for 4 months. She does not sit still, very well. She called a couple of days later, answering machine said the same thing.

thats pathtetic

Great post John,

We (the licensed real estate professionals) are partly responsible for this ridiculous trend. What happened to counseling both buyer and seller? The only way to truly quantify a buyer's intent is to insist on money going into a title company's (or attorney's) escrow account once an offer has been accepted. You can bet that will eliminate the wacko buyers who think they can offer on 15 properties in a weekend!

A loss mitigator I know tells me that if an offer comes in with a copy of a personal check attached, the offer goes immediately into the trash. The only ones that get looked at are the ones that are certified checks or money orders made out to the title company working with the seller (and the listing agent should be sure that is clear in the MLS).

When it comes to a short sale, I don't send in the package to the lender until I have a reasonable (market value) offer and a confirmation letter from the title company that the money is in their hands.

Connie Addison

#11 "Here's a different point of view from a listing agent's perspective. Many of my short sale listings are priced deliberately under market. Yes, it creates a bidding war, but I represent the seller, not the buyer. I attach a tip sheet for buyer's agents to my listings in MLS. It suggests that buyer's agents should examine the comparable sales, which is simply good business practice in any real estate transaction, short sales notwithstanding."

The practice above is so misleading to the buyers. As we know, most are looking for homes on the net in their price range. They call you up and want to see a home they think they can afford until you tell them what's really going on. I have seen homes sell for $80K over asking. I view this as FALSE ADVERTISING! It creates a lot of extra work for buyer's agents because the buyers want that same house in their price range but are not able to get one because the advertised price is not the true value.

Maybe I'm not understanding something here. If a buyer submits multiple offers on different properties, dosen't he/she run the risk of having to pay multiple commissions and/or become subject to lawsuits if more than one offer gets accepted??? And what about the buyer's agent??? Doesn't he/she run the risk of becoming subject to lawsuits and/or ethics violations??? Please correct me if I am mistaken.

Here in CA, buyers do not pay a commission, the seller pays the commission. I don't agree with putting the EMD into an escrow account prior to getting the offer accepted. Can you imagine waiting for the bank to mutually release the deposit? That deposit doesn't belong to the seller yet, so it shouldn't be cashed until the offer is accepted.

Wow, this makes me tired! After reading this, I know how particularly unsuited I am functioning in the traditional manner that so many of you are mastering. I'm glad I get to refer my buyers leads to people like you!

""A loss mitigator I know tells me that if an offer comes in with a copy of a personal check attached, the offer goes immediately into the trash." Whatever happened to all written offers "must" be presented to the seller? Is that not the way it is in your state? Just curious. Thanks.

Let me share some of my frustration as a buyers agent. Many REO agents in our area feel they are either too important or too busy to be bothered unless the buyer is their client. They list a homes price lower on their personal website than it is actually listed in the MLS. They leave comments in the MLS that they won't return phone calls about availablity, they leave comments in the MLS not to call to check the status of an offer you submitted until after 10 days because the banks sometimes take that long to respond. Then they never call or email to tell you if an offer was accepted or rejected. As a buyer or a buyers agent what are we supposed to do? I have to do my job and find my buyers a home. I don't go out and write 10 offers at the same time but the way the market is at least here in Riverside County buyers can't take the chance to see if the LA is going to decide to do their job. I'm not saying all REO agents are this way but this is haapening more frequently and is very disheartening for a buyer.

I will end my rant there because I have already gone through this: see Customer Service-It's not just about your client!

SEP

John..Thanks for the post. I hadn't considered the challenges from the REO listing slant. I haven't worked the Hemet/San Jacinto market but what I'm experiencing with your neighbors in Moreno Valley and Perris is nothing short of utter "MADNESS". AARGHH! Slick....is a very good term for what the LA's are pulling. Here's my experience as the Buyer's agent.....Short Sales and REOs listed by the dozens each week but you can't show them. AARRGHHH! Consistantly, LA's don't bother with signs or lockboxes or publish wrong combos in the MLS. AARRRGH! Some listings languish on the market for 75, 187, 259 days or more while the LA sits on it and refuses to return your calls or respond to your offer contingent upon interior inspection. So you resort to writing multiple offers on anything even slightly interesting to your Buyer contingent upon interior inspection only to find that most have 40 offers or the bank is working with an offer. AARGHHH! How is that possible when you can't get in to show the house and you can't get through to the LA?????? AAARGHH! And it still shows active in the MLS! AARRGH! Until a little quick research reveals an amazing ratio of these LA's listings double ended..a few in particular....all but one double ended in the past 14 months AAARGH! Slick- Yep! Unethical- You bet ya! Just plain wrong on multiple levels - Absolutely! Wrong to the Buyer...wrong to the Seller,,,,wrong to the SA,,,,,and wrong to the bank/lender! So Selling agents do anything to give their Buyers a little hope and a tiny chance at getting to buy a home. What else can we do? What happened to professional courtesy & ethics? How do we stop the madness???

SEP

I disagree with your tactics completely. It seems to me you are displaying some sort of control-complex, where you are determined to be in control and clearly attempting to control everything. It's agents with your mentality that are creating the wave of frustration for everyone else. It's a buyers market, and as a buyers agent we ARE forced to put offers out there if the buyer EVER expects to get into a home. We are NOT doing anything unethically and with the appropriate addendum's there is nothing seedy or dishonest.

Respectfully speaking, I appologise if my views seem harsh, but yours do as well. Congrats on the featured post!

I hate it when listing agents add extra hoops. If you have to have the earnest money check today why can you not come get it from me? My time is just as valuable to me as yours is to you. If your office is a 45 minute drive one way for me do you not think it makes me mad to have to bring it to you? Do you not think I would rather sell a listing that the agent is not such a pain to work with?

The selling agent has a life also we have children who have ball games a such for us to go watch. We like to spend time at home with our family, we like to have some down time. Bottom line our time is valuable to.

When we submit a offer and then get the counter on the bank addendum's sometimes the buyer will back out. After all they more or less say. All time deadlines that apply to the buyer must be followed to a T and time line that applies to the seller does not mean squat. If the buyer does not close on time they will be charged $100 per every day late. If the seller has a delay the will get around to it whenever they feel like it. Limited Warranty Deed, Seller will not fix anything, seller knows nothing about the property, The buyer can not sue the seller however the seller can sue the heck out of the buyer if they do not close. And the list goes on and on about all the extra rights the seller has and all the extra buyer requirements. I have gotten 16 page addendum's that are filled with sh---------. They stop just short of making the buyer say that if they do not close for any reason they will give everything they have to the seller then shoot themselves. Also they require you to use the sellers attorney which is conveniently located an hour and a half drive away and they charge twice what the local attorneys charge.

Bottom line the properties end up selling for much less than they would if the seller and there agent were not such a pain

SEP

Good for you to set up rules to make this nonsense stop. I totally agree that writing multiple offers is not correct though not against any rules or illegal. Too me it's just, which home do you want to buy? It's not like a pair of pants - blue or brown? It's a house and one of the largest investments people make. Congrats on your feature.

SEP

Interesting... When I collect my clients earnest money I never cash the checks. I keep them in the file with the binder and if the offer is accepted I give them their personal checks back and collect a bank check for the full down payment amount for the contract signing. Your rules clash with my rules. Does this mean you will never work with me because the earnest money is always collected in the name of my firm? (LOL) I rep the buyer and we make our own terms that reflect the buyers best interest. :-)

I don't write multiple offers with one buyer because I want an answer in a reasonable amount of time. I understand why brokers would and wont knock their business model, however, I think if you make an offer and a seller accepts you should immediately cancel the outstanding multiple offers when a sales contract is executed unless the buyer is purchasing more than one building. Is it permissible to do this? Absolutely. Don't make something legal (multiple offers) seem illegal or unethical just because you don't like it.

As a buyers broker I have to procure purchasers ready, willing and able to purchase real estate. Upon execution of a purchase and sales agreements by such purchasers with underwriting or cash in place, I would become unconditionally entitled to any real estate commission earned because an executed contract is what enables the purchaser to close escrow. Not a binder, people, at contract with funding in place and due diligence completed is when we earn that puppy because that is the point where my buyer is able to buy.

Here's an interesting example regarding this. It is based upon the unique circumstances of the contractual transaction at hand. Every deal is unique. No two plots are exactly alike but what element do they all have in common with the court? The executed contract.

Binders are not the same as contracts. They spell out the points of order of a potential contract and provide a window of opportunity for due diligence (e.g. inspection, appraisal mortgage) and trigger the contracts being drafted and amended. Without both signatures (sellers and purchaser) on a sales contract you have squat regarding commission issues. Don't be fooled by pre-negotiations and stop trying to act as if multiple binders from a buyer who can buy one or ten homes is informtion you are entitled to (unless they bid on all of your REO listings - LOL). Your transaction at hand is your issue. Secure your contracts and then you have something to scream about. Not legal advice just common friggin' sense... :-)

SEP

I am at a loss to see how there is anything wrong with buyers offering on multiple properties. In Los Angeles, homes are flying off the shelf in multiple offers. Buyers know their offer is one out of 25. If they wait to find out if their offer is accepted, they lose out on the opportunity to potentially buy a different property. It's crazy, but I don't see a way to represent buyers well without giving them the opportunity to write on more than one property. Until an offer is accepted, there is no contract.

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