There is a lot of discussion regarding the duties of a short sale negotitor. There has always been a lot of dispute on the subject of who should negotiate a short sale. There is a lot of merit to the notion that the listing agent (or buyer’s agent) should negotiate the short sale approval. I work with numerous investors and there have been a lot of problems with this.
Today, there is a REAL problem. A third party negotiating firm had been handling negotiations. The listing agent became impatient and demanded that she negotiate the short sale. Everyone agreed. Seven months later, there still is not approval (although we are consistently told that “it is coming”.
Buyer was advised A YEAR after the initial offer that there is another contract on the property. Other buyer was similarly unaware that there was a prior accepted offer.
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Ok, Houston, we have a problem. The listing agent/negotiator counters that the lender told her to get other offers. In so doing, she arguably violated her duty to her clients (not to mention engaging in legally actionable and unethical behavior). The second offer is for $10,000 higher on a million dollar sale but it is a 20% down payment with financing contingency and the initial offer was cash. We don’t need to discuss which offer is the better offer.
The problem is that there are now two sets of unhappy buyers and a listing agent/negotiator that put herself in harms’ way by taking the advice of the lender’s representative. She as quoted this afternoon as saying, “I hope that this property just goes into foreclosure” Survey said….Bad Answer.
The point in all of this is that everyone must be exceptionally careful in short sales. What appears to be a good idea at the time may actually be a very bad idea. Everyone must always remember their respective duties and avoid being placed in a position to violate a duty to your client.
Padraic Deighan J.D. Ph.d
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