Do You Submit Offers Or Contracts To The Short Sale Lenders?

By
Real Estate Broker Owner with Bryant Tutas-Tutas Towne Realty, Inc BK607690

Short Sale Agent Network

Hi Folks. Here's an email I received yesterday from one our members at www.ShortSaleSuperStars.com. It shows the common misunderstanding that lenders handle short sales like they do REOs (foreclosures).

Hi Broker Bryant,

I read some of your comments on Short Sales Superstar
 

I am a potential buyer.  We have bought several properties in the past but are very inexperienced with short sales.  We have been looking for a home for a long time and have not been able to find what we are looking for until now, except that the property is a short sale and an offer has already been submitted to the lender.  So, instead of just walking away, I am hoping to learn a little more about how short sales work in the hope that we may have a chance at purchasing this house if we approach it in the right way.
 
The seller's agent has submitted an offer to the lender but the lender has not accepted it yet (I have a feeling that the seller agent is not very experienced with short sales either and just sent it to a department and has not had much communication with the lender). We are strong buyers with 60% down, a three figure salary, and pre-approved loan, but I don't know if this is even considered in a short sale. We want to make a competing offer and would have done so via the seller's agent, but the seller's agent will not submit our offer to the bank because she already has an offer she submitted and says it may sit at someone's desk for months before she hears back from them.  The lender still has not accepted/approved this offer, but the seller agent will only accept our offer as a backup offer and will not submit it to the lender unless the first offer made is declined. She tells me that you cannot submit two offers to a lender.  Is this so?

Prior to this conversation with the seller's agent it was my understanding that until the offer is accepted by the lender, multiple offers can be made and presented to the lender. I would imagine that lenders actually like and prefer receiving competing offers, is this not so?  If so, I am wondering why this agent will not submit our full price offer to the lender. Is she right to do this? Is there anything we can do about it?

My response:

The agent has more than likely submitted a contract to the lender. NOT an offer. In a short sale the lender is being asked to accept less (short) on the amount owed. They are not deciding on whether or not to accept an offer. The lender is not a party to the contract. That's between the buyer and the seller.

At this time, you can submit an offer to the seller, through their agent, and see if you can negotiate a deal and have your contract accepted as a back up. This way if something should happen to the first deal your contract would move up to the first position and then be submitted to the lender.


Submitting more than one offer or contract to the lender creates confusion. Lenders want ONE fully signed and accepted contract to work with. You have to remember they do not own the property. It's a different situation than a REO (foreclosure). END

So remember, a Short Sale contract is still a contract. We submit contracts to the lenders NOT offers. Got it?

Are you facing foreclosure in Florida?

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

The BIO for Bryant Tutas

Copyright © 2010 http://www.brokerbryant.com/ | All Rights Reserved


Posted by

 

Join Our Facebook Fan Page Check Us Out On Google+ Follow Us On Twitter

short or stay

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

The BIO for Bryant Tutas

 

 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Winderemere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

 Copyright © 2013 http://www.brokerbryant.com/ | All Rights Reserved

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the graph to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Topic:
Home Buying
Location:
Florida Osceola County Celebration
Groups:
Real Estate Rookie
Realtors®
Tags:
short sale
contracts

Comments 26 New Comment

Rainmaker
573,313
Neal Bloom
Realtor CRS-Weston FL Real Estate
Keller Williams Properties, Weston FL

Creates confusion? You mean creates more confusion. Most of the personnel you deal with usually lose or ask for the same paperwork on and on. We even had a case where we submitted everything through Equator. they still claimed they needed the same documents which I thought was odd since Equator is supposed to be this flawless software that doesnt make mistakes and also they claimed to have contacted us about something but it was not documented in the notes. I agree..only as a back up if you've submitted a fully executed contract...seller and buyer already have agreed...lender just haven't gotten to it yet.

October 08, 2010 07:40 AM
Rainer
172,180
Keith Lawrence
ABR, CDPE, SFR, 203K Specialist
RE/MAX Properties

Great blog.  I get calls from agents/brokers with similar questions.

October 08, 2010 07:59 AM
Rainmaker
230,553
Lina Robertson Jones
REALTOR, Springfield MO Area Homes for Sale
Ozark, Nixa, Republic & Willard Real Estate

I'm in total agreement with you!  We are STILL having to educate agents here in our area.  However, I recently received approval documents from a lender that requires the agent and the seller to confirm that ALL offers have been submitted to the bank.  Ugh!  At that point, I submitted a backup offer we had received, and the bank stated they would accept the second offer instead of the first.  I explained that contractually, the first buyer had the contract. I went back to the first buyer, and they agreed to match the offer. 

How would you have handled that situation?

October 27, 2010 05:21 PM
Rainmaker
1,080,090
Bryant Tutas
Broker/REALTOR, Tutas Towne Realty, Inc
Bryant Tutas-Tutas Towne Realty, Inc

WOW!! I would NOT have submited any other offers to the lender no matter what they asked for. Now your seller certainly has an issue. Who was the lender?

October 27, 2010 05:37 PM
Rainmaker
230,553
Lina Robertson Jones
REALTOR, Springfield MO Area Homes for Sale
Ozark, Nixa, Republic & Willard Real Estate

There was a first and second with Fifth Third.  Both approval documents had that verbage in it.  They claim that it is a requirement of Freddie Mac now.  Me, my client and my broker went and met with an attorney, who claims that the first wasn't technically under contract without the bank's approval, and that the bank has the right to see all offers, so we complied.  Could make future deals really, really sticky if this is true across the board.

October 27, 2010 07:38 PM
Rainmaker
1,080,090

Bryant Tutas

Broker/REALTOR, Tutas Towne Realty, Inc
Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the clock to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information

Contact Bryant Tutas

Avoid Florida Foreclosure www.CentralFloridaShortSales.com

Florida Property search

Locations of visitors to this page

Delivered by FeedBurner


Visit Short Sale Superstars

All original, all the time.          Broker Bryant's ramblings on    Real Estate in Poinciana, Fl

 

Florida Foreclosures and Short Sales

Buy A Florida Retirement Home
Visit TTRealty Network