Presenting Multiple Offers to the Lender for Short Sale Approval

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Real Estate Broker with www.AtHomesCharlotte.com | Savvy + Company Real Estate 228209

Presenting Multiple Offers to the Lender for Short Sale Approval

Questions and more questions!While visiting at the NAR site regarding the new short sale designation and visiting the 'discussions'  link, I found several questions relating to short sales and one, in particular caught my eye.  

"Can multiple offers be submitted to the lender without seller signatures or can only one offer be negotiated at a time?  Can the seller sign multiple offers to submit to the bank?"

Ahh, the question of the year!  In Broker Bryant and Wendy Rulnick's classes (visit www.ShortSaleSuperstars.com) on short sales, we learned that we only submit one offer at a time.  Numerous articles and webinars that I've seen during the last year also instruct agents to submit only one offer at a time.  However, repeatedly, this question arises in our day-to-day business.  Just yesterday, a client of mine who is selling a beach property informed me that it's been months and they have heard nothing from the bank--he said that they just could not understand because they had presented several GOOD offers to the bank!  When I questioned him further, he explained that his agent had informed them that this is he way that she was supposed to handle this but, cannot tell him why the BPO has not been ordered or the bank has not responded.  He asked me my opinion.

Short Sale or ForeclosureHere is my best understanding of this process:

A foreclosure property is owned by the bank, therefore, just as any client, we are required to present all offers to the bank for their evaluation, review and subsequent acceptance.

A short sale property is still owned by the homeowner or said owner of record, NOT the bank.  If we receive multiple offers for a short sale:

  • We present them all to the SELLER
  • We review each of them with the SELLER
  • We assist the SELLER in determining which Offer carries more weight--
    • Is the buyer prepared for the lengthy short sale process?
    • Is the agent willing to work with us during this long process?
    • How qualified is the buyer--if the bank were to counter this Offer, would they qualify for a higher mortgage or is the buyer at their maximum?
    • How 'clean' is the Offer?
  • Evaluate all aspects of the Offers and compare them, selecting the strongest
  • Remember that the strongest Offer does not always mean the highest sales price!
  • Keep the cleanest & best Offer and have the sellers sign and return copy to the buyer
  • NOW, submit the entire package including hardship letter, financials, comparables, etc. with THIS ONE ratified Contract to the Lender for their approval.
  • Begin the waiting short sale process.

Sensory OVERLOAD!Once again, this is only MY understanding but, I have not spoken to one short sale expert who submits multiple offers.  Instead, it has been my experience that if multiple, unsigned (by the seller) offers are submitted to the bank, nothing is ever done with them and this is a sure sign that the property will be foreclosed upon if the seller is unable to make their mortgage payments.  

I would love your opinion as I know that many areas of the country have done far more short sales than we have here in Charlotte NC and I value your knowledge and expertise.  

One thing that I know for sure with regards to the agents questions is that you don't submit multiple SIGNED offers (by the Seller) to the bank--you can't be 'under Contract' with multiple, independent buyers at once!  The other part of the question, I get weekly from someone and would like to be able to confidently answer as to, "Can you submit multiple, unsigned Offers to the lenders for approval on short sales?"

What say YOU?

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  1. Joe Niece 11/05/2009 10:50 PM
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Debe Maxwell
Charlotte Homes for Sale - Charlotte Neighborhoods
www.AtHomesCharlotte.com | Savvy + Company Real Estate

Hi Maria!  I forwarded this link to a broker/owner in FL who can possibly assist you.  He's the most knowledgeable person I know with regards to short sales--especially in FL!

I cannot answer to whether you can bring in your own agent but, this is definitely one of those times that the lesson learned is quite frustrating.  I truly hate to see consumers taken advantage of and unfortunately, it happens far too often.

I don't think the agent that I contacted for you stays up as late as we do but, hopefully he'll answer your question early in the a.m!  Have a great evening...

April 29, 2011 11:33 PM
Rainmaker
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Bryant Tutas
Broker/REALTOR, Tutas Towne Realty, Inc
Bryant Tutas-Tutas Towne Realty, Inc

Hi Maria. Deb sent me over here to answer your question since I'm in Florida. It sounds like you may be involved in a transaction where the listing agent does not have experience with short sales.

Only one accepted contract should be submitted to the bank. That's their requirement and it's really the only way to handle it. Escrow should be placed according to the terms of the contract. Right on the front page it will outline when the deposit should be placed in escrow. This will be addressed again in the short sale contingency addendum ot the contract.

My suggestion would be to seek legal advice.

I hope this helps.

April 30, 2011 07:19 AM
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Debe Maxwell
Charlotte Homes for Sale - Charlotte Neighborhoods
www.AtHomesCharlotte.com | Savvy + Company Real Estate

Thanks, Bryant.  That is what would apply for NC as well but, since I don't know your state laws, I thought someone who did would be more appropriate to answer Maria's question.

Good luck, Maria.

Have a wonderful weekend...

April 30, 2011 09:20 AM
Anonymous
Maria

Thanks so much to both of you!!!!  I will have to first of all clarify with him what he did and then I will decide what to do.  Hope you have a wonderful weekend.

April 30, 2011 05:05 PM
Anonymous
Tammy

Love this post - so timely for us right now!  I'm wondering what the normal procedure is if there is a signed contract (agreed to between buyer/seller) that is submitted to the bank and the bank rejects the price (assuming they want a higher price).  Is the potential buyer able to negotiate with the bank at that point or are back-up offers now put into place?  Is the original buyer signed contract held up until the point that the buyer walks away if they can't go any higher on price?  Just wanting to understand what the steps will be if we offer / are accepted by buyer and then rejected by bank.  Thanks for all your input!

November 23, 2011 02:05 PM
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Author Bio: Debe Maxwell is a Certified Residential Specialist in the Charlotte Metro region with a focus on the Charlotte luxury home market. My team of agents each have their own specialty areas, a benefit to anyone buying a home in Charlotte NC.

 

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