That may seem like a strange question on the surface, but it's really not that complicated.
One of the problems that I've run into as a buyer's agent on short sales is knowing if our offer ever made it to the bank? There's not really a system in place to keep track of this, and unless you have a negotiator who is willing to speak with both buyer and seller, this is something that can't be verified.
So why is this a concern? Simple. I've talked to several local agents as well as buyers who have experienced the following scenerio...
First, they submit their offer on a property that has been listed (and often too low) as a short sale.
The listing agent receives it, has their seller sign it, and tells them that their offer will be submitted.
From that point, everyone begins to wait... and wait... and wait. Emails go back and forth and phone calls are exchanged. Until finally, months later, the day comes! Yeah!!!
The bank has DECLINED your offer.
"What? Why? What's wrong with our offer?", they scream. Probably nothing. But that's not the rub.
A couple of days later (and notice I said "days", not weeks or months) the property is showing "pending" on the MLS. It's in Escrow! How is this possible? It's not possible, right? There must be a mistake!
Wrong, and here's the rub. There really isn't anything stopping the listing agent (aside from a couple of little things like "ethics" and "morals") from submitting a different offer to the short sale lender. Maybe between the time your offer was accepted and the listing agent getting around to initiating the short sale, maybe a higher offer came in, or a cash offer, or a conventional with 50% down... who knows?
But many things could have happened in that time period, all of which would be beyond the control of the buyer and their agent. But if the listing agent doesn't submit your offer, the offer they said would be submitted, there isn't a system in place to check or balance this.
So what am I proposing? I wish I had the perfect solution. Maybe one of you has it (please share).
My suggestion would be to have escrow involved and have some type of "phantom escrow" become a requirement. If escrow had to be opened in some manner, then both the buyer and the seller would be, for lack of a better phrase, "stuck with each other". But it would eliminate the ability for a listing agent to submit a different offer than the one they said they'd submit. It would allow the buyer to know their offer was the only one submitted. Not to mention that getting around this would be extremely difficult.
I realize some reading this might be saying to themselves, "This is totally unnecesarry and doesn't happen enough to warrant such a change." Well I hate to be the bearer of bad news, but my fellow agents, it happens a lot more than you realize. How many of you have lost a short sale deal and felt like something wasn't right? Go back and check the listing. So far, when I've done this, about 50% of those listing are now closed sales. Maybe not everywhere, maybe not in all communities throughout the country, but ladies and gentleman, welcome to Southern California :-)
Don't get me wrong, there are many wonderful and honest agents throughout Orange County and SoCal. In fact, I'm proud to say that several of my friends are absolutely outstanding Realtors who would never ever do this themselves. This idea is in no way meant to be a deterrent as to how they handle their affairs. But we know from experience that our industry is also populated by some who are not ethical and who lack the character to simply say, "I'm sorry, but we're going with another offer." Those words can be tough, and no one wants to be the bad guy (or girl). But it's part of the job. We can only take one offer, so someone is going to get the bad news. Agents, please... stop trying to suger coat it! If you're going to say "yes" to the offer, then submit it! If not, then say "No", or "I'm sorry", or whatever polite and respectful wording you want to go with, but have the courage to be honest not with just your sellers, but to all of us who are working just as hard as you are.
I think we've all earned it.
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