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Buyer submits offers on multiple short sales with no intention of buying them all!

Posted by Sean Crosier on January 29, 2012 at 5:26pm in Short Sale Discussions

Just curious how you are all dealing with your buyers who want to make offers on multiple short sales. What do you think the legal implications are? How ethical do you think it is? How do you balance wasting everyone's time with your fiduciary duty to your buyer client?

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Replies

  • Mike Rosania February 1, 2012 at 6:55am

    While on topic of commited buyers, I seen that some short sale agents use some type of addendum explaining what the buyer is agreeing by potentially going under contract with a short sale listing. I am very interested in seeing what some of you guys may be using and willing to share as I would like to have something where the buyer signs off upon submitting an offer. Sorry if a little off topic but didnt want to start up a new thread!!

     

  • Bryant Tutas February 1, 2012 at 12:53am

    A buyer can make offers on as many properties as they choose. However they should only have CONTRACTS on properties they are willing to close on.

    • Sean Crosier > Bryant Tutas February 1, 2012 at 6:19am

      Good point of clarification. That is what I meant. Accepted offers.

  • P Nicolas Velecico January 30, 2012 at 4:42pm

     

     I have run into these buyers and they way I handle it is that they will loose their deposit if they dont go through with the sale

    • Mark > P Nicolas Velecico January 31, 2012 at 5:46pm

      So the buyers are locked in forever, even though the seller isn't?  

      You don't have a sale unless the lender plays along, and lenders are either great, or terrible at processing short-sales. 

      • Sean Crosier > Mark February 1, 2012 at 6:23am

        Not locked in forever. Only for whatever time period they agreed to be locked in to allow the seller to get bank approval. In California the default on our contract is 45 days but I frequently write in 30 days. Seems reasonable to me.

        • Jeff Payne > Sean Crosier February 1, 2012 at 6:44am

          Sean, what happens after 30 days when none of them have been approved?  Is there a provision to extend automatically?

          • Sean Crosier > Jeff Payne February 1, 2012 at 7:07am

            See attached... I normally write only 30 days to give my buyers a quick exit strategy (although you can always get out bc of inspection contingency). If it takes longer than 30 days but it lookos like were close to an approval, we will usually mutually agree to extend.

            CA Short Sale Addendum.pdf

  • Joseph Alfe January 30, 2012 at 9:29am

    This is why I thoroughly vet buyers and make them lock into the offer for 90 days.  It drastically cuts down on the walk-aways.  Read about how I set this up here:

    http://josephalfe.com/2011/11/hello-world/

    • Mark > Joseph Alfe January 30, 2012 at 1:24pm
      A ninety-day lock is fair, that is more than enough time for a bank to evaluate an offer,
      Any more than that is abusive- remember, a short-sale is always contingent on the lender.  
      Locking in a buyer is only fair if the lender is actually trying to close the deal.
      Not every lender negotiates in good faith. 
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