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The buyer wanted me to write 5 offers on 5 different properties... At the same time...

Reblogger Jessica Sulliman

Real Estate Agent with Garrette Custom Homes SA537042000

June 03, 2011 05:14 PM

Here at Ashby Realty, we don't do business this way. Every offer submitted by a client and accepted by a seller, short sale or not, has to be signed off by my broker within 5 days of acceptance. A short sale contract is no different than a contract on a traditional sale, except that the contract is contingent upon the approval from the short sale lender. Having 5 accepted offers hanging out there is unethical and a violation of AZ real estate law. Short Sellers are starting to sue buyers who bail on their homes and then the home is foreclosed on, and rightfully so. That home was kept off the market because they thought they had a ready, willing, and able buyer. Once a buyer has more than one offer accepted by a seller, they need to choose and be under contract on one home if they only plan to close escrow on one home. It's simply the right thing to do.

I think we all have been in this situation... But not all of us have reacted in the same way...

So what do you do? What can you do? What would you do?

The buyer says that they are tired of loosing out on properties, so they want to write a bunch at the same time... OR the buyer says they are tired of how long short sales are taking, and they want the property that will close the quickest...

There are agents that write several offers at the same time over and over... They call is "spraying and praying"... There are some agents that have 5 accepted offers on 5 different short sale properties waiting for ONE to be approved and eventually cancel the others. This is what led to short sale listing agents to start asking for deposits before lender approval...

It is my humble opinion, that if your buyer can afford only one property at that specific time, then you should only write one offer. IF you were to get two accepted simultaneously, you would have to cancel one, making a listing agent and seller a bit frustrated with you. And if it is a short sale situation and you are in contract with several properties at the same time, playing the waiting game... When you eventually cancel the contracts you don't want when one of the short sales are ready to close, you end up with a bad name, a mad listing agent and a seller that feels let down. OR what about the seller that took your offer in good faith, and you were just leading them on?

This is a small industry, and if you start bending the rules a bit, you can get agents unwilling to want to work with you in the future.

What would you do if a buyer wanted to write more then one offer, and they financially are not able to do it... Would you do it? More importantly, what would you say to the buyer? Please share! Is it an issue of integrity, or it is a necessity?

Chris Alston

CEO- Team Leader

Keller Williams Realty, Cupertino

20230 Stevens Creek Blvd, Suite E

Cupertino, CA 95014

408-850-6955

408-850-6956 fax

calston@kw.com

www.kw.com

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Dan Edward Phillips

Dan Edward Phillips - Eureka, CA

Realtor and Broker/Owner

Good evening Jessica, an excellent pot to put up again. It is the first chance I have had to read it.

Jun 19, 2011 06:13 PM

Lynn B. Friedman CRS Atlanta, GA 404-617-6375

Atlanta Homes ODAT Realty - Love our Great City - Love our Clients! Buckhead - Midtown - Westside - Atlanta, GA

Concierge Service for Our Atlanta Sellers & Buyers

Dear Jessica -
It is a bit demoralizing to wait for Short Sale approval and then have the people bail. In Atlana, Earnest Money deposits are the norm. Thanks for "re-offering" the question that Chris posed.
Have a happy day -
Lynn

Jun 19, 2011 06:22 PM

John Michailidis

Real Property Management of Sarasota & Manatee - Sarasota, FL

Real Property Management of Sarasota & M

I enjoyed reading this blog post! Thank you for sharing it!

Jun 19, 2011 06:29 PM

Aida Pinto

Independent Real Estate Broker - Los Angeles, CA

Real Estate Broker (562) 884-6196

Good evening Juessica....wow....I "sellers suing buyers who walk...things are sure changing.

Jun 19, 2011 06:34 PM

Denise Adame

AZ & Associates Real Estate Group - Phoenix, AZ

Hablo Español

Good Post!

As a buyer's agent I get asked this question quite often. Buyers don't like the idea of waiting and being committed to ONE property when there is no guarantee that the seller's lender will approve the sale. I've seen banks come back with unrealistic counter offers or sometimes even 'no response'......ever. So buyer's are simply trying to keep their options open, which they CAN do as long as it is disclosed upfront.

I personally have written multiple offers for buyers on REO properties. I have never had 2 or more acceptances at the same time so I've never had an issue with this. 99% of the time the acceptances on REO properties are 'verbal' and counter offers/addendums follow so technically you don't have a contract until the entire package is ratified by both parties. In my area the homes under $100K are extremely competive. Buyers are getting into bidding wars, and most of the time a buyer in this price range can expect to have several offers rejected before getting one accepted. With Multiple Offer Situations it's kind of a hit or miss game anyways.

Granted that with Short Sales I do agree with you and I do understand why short sale seller's will ask for 60-90 day non-refundable earnest money. A couple of years ago I wouldn't even show short sales, but now that the success rate for short sales has increased I will show them if the buyer really wants to see it. I do my best to get a feel for how experienced the listing agent is with working with short sales and try and gather as much info as I can about the seller's situation and loan details etc. If my buyer really loves the home and is willing to commit to it for at least 3-6 months then we submit our offer, if not I always recommend that we not waist anyone's time and just keep looking.

Jun 19, 2011 06:39 PM

Deborah D

San Ramon, CA

Great post, Jessica. I've always asked for a deposit upon seller's acceptance of buyer's offer and before sending the offer to bank for short sale approval. Not the full deposit stipulated in the contract, but a portion of it with the remaining balance due upon bank's written approval of short sale. It had worked well, except in one situation where my seller client disappeared on me after the bank denied the short sale. Although it was a small deposit of $1000, I still had to hunt for the seller to have her signature on the "cancellation and release of deposit" form. Thereafter, I've asked a seller to sign a "cancellation" form in advance, just in case similar situation happens.

No, I would never want to work with a buyer /agent who offers on multiple properties. In requesting the deposit, I also require the buyer to do their due diligence before cancelling the contract after the bank approves the short sale, or the deposit would be forfeited. This would deter some of those multi-offering behavior.

Jun 19, 2011 06:43 PM

Tim Lorenz

TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA

949 874-2247

I enjoy being a Realtor and my licence means something to me so I would not do it.

Jun 19, 2011 06:44 PM

Ronald DiLalla

Century 21 Discovery DRE 01813824 - Anaheim, CA

No. Orange Cty Real Estate

I'm with you Jessica, we have buyers doing he same thing here in So Cal ...it's like throwing something against the wall and seeing what sticks.

Jun 19, 2011 06:49 PM

Courtney Cooper

Cooper Jacobs - Seattle, WA

206-850-8841

hey there - thank you for reblogging this because i missed it the first time.

Jun 19, 2011 06:55 PM

Jessica Sulliman

Garrette Custom Homes - Queen Creek, AZ

CDPE, SFR, Queen Creek Real Estate 602-677-7977

Denise.....It has become a cut throat market here ....and I get the reasoning behind submitting multiple offers....the concern comes into play when a buyer has more than one of those offers ACCEPTED and then chooses NOT to withdraw the additional offers. This usually happens on short sales because the buyer wants to increase their odds of success. This would be fine, except that by increasing their odds of success, they are putting real people at risk of foreclosure. The reality is, if they can't/don't want to wait, then they shouldn't be looking at short sales. Being "under contract" on more than one property is the issue. I will submit multiple offers for a client all day long....it's the being under contact part that gets sticky!

Deborah....I, too, ask for a deposit upfront....but this has also bitten me in the past where the buyer knows they need to just play the waiting game and then they can get their deposit back once the inspection period is up for the 60/90 day period expires. If they want to cancel and move onto another property, I would much prefer they simply cancel ASAP so I can remarket the property sooner rather than later, for a truly ready, willing, and able buyer.

Jun 19, 2011 06:57 PM

MichelleCherie Carr Crowe .Just Call. 408-252-8900

Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA

Family Helping Families Buy & Sell Homes 40+ Years

This is what the word "NO" is for. As a listing agent, I straight out ask agents if the buyer is doing this.

Jun 19, 2011 07:03 PM

Steve Stenros

Poway,La Jolla,Del Mar,Mira Mesa,Carlsbad,Escondido,Temecula - San Diego, CA

CREIA MCI, ICC, ACI Home Inspector,San Diego

Wow, Jessica, your time is much too valuable to be playing those types of games. I agree.

Jun 19, 2011 07:08 PM

Pamela Seley

West Coast Realty Division - Murrieta, CA

Residential Real Estate Agent serving SW RivCo CA

Jessica, I don't do this for buyers and I sure wouldn't want that to happen to my short sale sellers. Great post,

Jun 19, 2011 10:11 PM

Mark Edwards

East West Realty - Suffolk, VA

East West Realty

Thanks for bringing up this controversial topic. I can understand writing a contingent offer, subject to obtaining a release from a different home that you're waiting to hear back on, but 5 offer? No way.

Jun 20, 2011 12:45 AM