Multiple offers on a short sale?

By
Real Estate Broker/Owner with NextHome Synergy AB066573
I'm in PA and have worked with quite a few short sales with much success. I've recently run into a situation, however, where the seller has accepted an agreement and submitted the short sale package to the lender I only to have a second offer come in from a second buyer. I explained to the second buyers agent that an offer had been accepted and submitted but her buyer insists on a written rejection from the lender! I want to be cautious in maintaining full disclosure to the appropriate parties....it would seem to be in the sellers' & the lenders' best interest to terminate the first agreement in favor of the second. Having said that..the seller still owns the property, not the lender, so wouldn't it stand to reason that simply stating that there is already an executed agreement of sale be sufficient? We've offered to keep the second buyer's offer as a back up but he/she is insisting that it be presented to the lender. Anyone run across this? What would be the proper procedure?

Comments (3)

Steve Oren
Keller Williams Beverly Hills - Beverly Hills, CA

Renee, I'm in Los Angeles, CA and it may be different here but... When I take a short sale listing, the homeowner give ME an authorization letter. that is when his/her involvement stop and mine start. I never heard of a homeowner accepting an offer. Aren't you his representative? didn't he gave you the authorization power and signed the listing agreement? and in regards to the second offer, just call the bank's negotiator that is assigned to this file and tell him that this is a better offer. All he'll tell you is that this will stop the process of the 1st. and if it is O.K. with you, he'll negotiate the 2nd. What may happened his that a new negotiator will be assigned. The fact is that most lenders will not accept more then one offer and will take another, only if they have to. Good Luck!

Mar 26, 2009 07:20 PM
Anonymous
Anonymous
Thanks. I'll call the negotiator and see what they want to do. In PA the lender requires that the seller sign/accept the contract initially. I have authorization to communicate with the lender on the sellers behalf but not to sign agreements.
Mar 27, 2009 02:15 AM
#2
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

HI, Renee. In California, there is a lot of controversy about this (even on AR). As listing agents, we have a fiduciary obligation to our seller, not to our seller's lender. After all, the seller signed the listing, not the lender. So, we help the seller to decide what is in his/her best interest based on our expertise. For some, it may be that it is in the seller's best interest to get the short sale over with as quickly as possible, and submitting another offer to the bank may actually slow down the process significantly. It is so convoluted, and can be argued in so many ways. Good luck!

Mar 28, 2009 08:15 AM