Have you had this happen with a short sale?

By
Real Estate Agent with Lockhart & Associates Real Estate

I had a strange dealing with a short sale and am looking for some feedback from anyone who can assist.

I have a buyer interested in make a very good offer on a short sale property here in the area.   I contacted the listing agent and he is telling me that he has a cash offer from his office and they have submitted that to the bank and are awaiting a reply and that my offer would be submitted to the seller in back up position and would not be submitted to the bank until they responded to his 1st cash offer.

I am understanding that all offers should be submitted to the bank so that they can accept or counter the highest and best.  However, this realtor is using the technicality that the owner of record is still the seller in foreclosure and that although he has to present the offer to the owner of record, he has no legal obligation to present it to the bank.

He has informed me this is the way he does business and that unless I have an attorney advise him in writing on why it is not legal, then he will continue to do business that way and not present our offer to the bank.

I hate to assume, but it seems to me that his whole process is a little sketchy....

I have contacted our broker's attorney....but I'm wondering....has anyone else run in to this issue?  Any suggestions?  

Comments (11)

Robert Huntsinger
Empire Realty - Upland, CA
Empire Realty Upland, CA - Full Service at a Discount

Nope, but it sounds a little fishy to me.  I wonder if the other agent is on both sides of the submitted offer.

Take care!

RJH

Oct 16, 2008 04:33 AM
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

I worked and closed on a short-sale and this was the way it was represented in my case; I had the buyer and according to the Realtor they only work on 1 case at a time.  I have not worked on the seller side so I don't know if this truly the case.  I hope this helps.

Oct 16, 2008 04:36 AM
Angelia Garcia
Pure Realtors - Dallas, TX

Sorry to say but I had a similiar situation.  I had the listing and an agent sent me an offer.  The offer that the bank already had was higher than the offer she sent me.  She asked if I had sent it to the bank as well.  I said no because the seller is not agreeing to her offer.  Bottom line, the seller has to accept it.  He did not want to have to pay any more money than necessary if there was a loss to the bank.

Oct 16, 2008 04:37 AM
Michael A. Caruso
Surterre Properties - Laguna Niguel, CA

You may wish to take this up with MLS person at your Association of Realtors.  Too many agents creating 'their way or the highway' in these scenarios and surely our MLS will have guidelines.

Good luck.

Please remember me if you learn of anyone moving to "The OC.

Best regards.

Michael Caruso, Broker ABR ABRM CRB CRS GRI

2007 President, Orange County Association of Realtors

Oct 16, 2008 04:41 AM
Lotta Jakubowski
Execuhome Realty-100% Realty Team w/LSJ - Baltimore, MD

The situation the bank only does one offer at a time on a short sale is correct.

Oct 16, 2008 04:45 AM
Ritu Desai
Samson Properties - Ashburn, VA
Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949

I have heard that in the past, but it was after the owner not the bank had reviewed our offer. It was lower than the other offer they had. But the Realtor was nice enough to ask us if we can be the backup if the other offer falls apart. My clients decided to just wait rather than be the back up and I asked the Realtor to give me a call. The other offer was accepted and closed. In your situation have your broker speak to the listing agent broker.

Oct 16, 2008 04:49 AM
Don Fabrizio-Garcia
Fab Real Estate - Danbury, CT
Owner/Broker/Trainer - Fab Real Estate

The owner is still the seller and can reject your offer.  No problems there.

Many agents will only submit one offer to the lender.  Many lenders will only want to review the "highest and best" offer.  This is a very valid standard of practice on the listing agent's part.

Oct 16, 2008 05:02 AM
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

Some agents just seem to want to make their own rules.  I would take it up with his broker immediately.

BTW you might want to check the blog customizer.  It appears you have black text with a black background.  All the navigation tabs can't be seen.

Oct 16, 2008 05:08 AM
June Piper-Brandon
Houwzer Inc - Baltimore, MD
Piecing Dreams One Home at a Time

I have heard this in the past, but it seems fishy to me.  Listing agents are obligated to get the highest and best offer for a house for their client.  In Maryland, not sure about elsewhere, you must present all offers to the bank on a short sale (they aren't the client, the owner of record is and it's in their best interest to get a better price).

Oct 16, 2008 05:25 AM
Wendy Lockhart
Lockhart & Associates Real Estate - Saint Pete Beach, FL

Thanks for your responses!!     The agent did admit he has both sides on the first offer which is lower than my buyer's offer.  Agent is Broker....deals in short sales only.

Oct 16, 2008 05:31 AM
Rich Mielke
REMAX Results, Frederick MD - Frederick, MD
REALTOR, Frederick Maryland Real Estate

In our area, on a short sale, once the seller has accepted the offer and it has a 3rd party contingency, the MLS status must change from ACTIVE to Contingent/No Kickout. Other offers should be submitted to the seller, not the bank.

Oct 16, 2008 05:32 AM