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In a short sale let the lender decide for themselves which offer they`ll accept.

We`ve been going back and forth with another Realtor who refused to notify the lender about our "cash offer" for a condominium they were listing.

Apparently, advised by their Broker they felt the offer they had sent to the lender was sufficient.

They believed the lender would only consider one offer at a time, guess what? The lenders want to entertain as many offers as you send them!

They believed the lenders wouldn`t entertain an "All Cash Offer" .

After two days of going back and forth with the agent they finally agreed to send in our offer.

Two weeks went by and we received notice from the agent that the lender had in fact decided to go with our cash offer providing we can close within the next two weeks.

The other Realtor is ecstatic as well because they`ve been trying to sell this property for 9 months.

Had they not sent in our offer, we would have advised our client to look for another home.

Quite honestly, the rules of dealing with "Short Sales" change every day. In fact there are no rules, each lender has a different criteria.

It`s wise to send all offers to the lenders until they decide which offer is suitable for them!

Posted by Scott Daniels Florida Real Estate 2.0. Agents Earn 100% Commission. on 03/03/2009 04:54 AM

Comments (10)

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10 Comments on In a short sale let the lender decide for themselves which offer they`ll accept.

MAR

I believe that sending multiple offers to lenders is one of the things that has caused logjams with short sales.

Seems to me that if the buyer is well veted, qualified, ready to close, noncontingent, etc. an agent can process one contract, get it to closing without having to wait for a lender to wade through multiple offers. The bank personnel do not know how to evaluate multiple offers. They can usually only look at the bottom line and there are real estate matters that make some offers superior to others.

Of course, the bank must be in agreement with this process.

I for one, don't submit offers for my well qualified, ready buyers when I know there are multiples.

Scott,

Last week I had a situation where one of my agents wanted to submit an offer and the sellers agent would not present it to the bank. Long story there.

I happen to have a very close relationship with the banks attorney and gave him a call. His exact words were "The broker does not get to make that decision."

Nuff Said.

I agree with Len 100%. I will consider you as a back up offer if you want to wait and see if the first buyers can not go trough. . .my fiduciary duty is to help my client avoid a foreclosure and sending the bank every single ridiculous offer that comes will NOT be beneficial to my client.

About a cash offer. . all purchases are cash offers, there is no difference except the time it will take to close.

It's like saying next time you fill up your car with gas. . I'm not going to pay you with a credit card. . I got cash!

Are you expecting better gas?????

If the buyers agent on a short has done their job properly the property is marked as pending while you are clearing contingencies. Why is it any different to wait for lender approval whether it is for the seller or for the buyer( contingent on final loan approval).

The property should be marked as contingency pending when there is an offer that is acceptable to the seller, signed by the seller, and that they are negotiating with the lender for approval on.

The listing agent still has a duty to present ALL offers to the seller. If the seller in a short sale agrees with the offer, then it MUST be presented to the lender as well. Additionally, the lender in a short sale may have requirements concerning multiple offers. As the listing agent, you should contact the lender to determine what they want you to do. Simply put, it's not your decision, as the listing agent, to determine what offers go through and which ones don't.

As to listing a short sale as pending, James, it shouldn't be listed as pending UNTIL the offer has been accepted by the lender, in writing, because you do not have a valid offer until that happens. If an agent is listing their shortsales as pending before that, they aren't doing their clients any favors. That said, you should inform any other agents considering showing/making an offer that there is/are more offers on the table.

Whatever happens to "Submit all offers ina timely manner?" Sounds to me like there could be litigation issues brewing onthe horizon by offers not being being submitted properly.

I wrote a blog called Short sales stink. They do mainly because of the lenders. What gall they have

Scott sorry to high-jack your Blob but Roger isn't the offer contingent on 3rd party approval? Under the theory that it should not be made pending if the seller has accepted then a traditional purchase should not be marked as pending until all contingencies including loan commitment are satisfied.

MAR

Scott, state laws may vary, but you're talking about apples and oranges, my friend. In every short sale I do, we have an addendum that basically says that this only becomes a valid, binding contract once the '3rd party' agrees to it. The reason is simple. The sellers will sign ANYTHING, but aren't capable of fulfilling that commitment without the lender approving. So, until you have a valid, binding contract, it shouldn't be marked as pending or pending/active, in my opinion.

By contrast, the 'standard' contingencies you mention don't negate the valid, binding contract terms. Also, even with loan commitment, you usually have some idea of the buyer's ability to obtain the loan (via a pre-approval/pre-qual letter). You're not going in blind (the buyer's have something from their lender). The sellers don't have that luxury. In my dealings with lenders and shortsales, their response BEFORE an offer is made is "bring us an offer and we'll see." Hardly a guarantee of a shortsale at ANY price, which is why a shortsale P&S is NOT a valid contract until the lender approves of it.

MAR

Brokers and agents seem to forget they work for the seller not themselves. This goes on to much today. We have had some very serious talks with brokers about this practice

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