Made it all the way to investor approval to be denied, My realtor and seller are related

I am a buyer that found a house on realitor.com  I did not have a realitor so  i contacted the listing agent directly.  we put in a offer at fair market value and got all the way to investor approval, yesterday the realitor informed me that the bank has denied the offer due to the seller of the house is her sister.  the realitors broker said that he would put another realitor on the case, now the bank doesn't want to deal with the broker or the realitor at all.  Does anyone have any suggestions how to fix this.

Appreciate any Help

Paul

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Who is the lender, Paul?  Was the relationship disclosed at the beginning of the sale?  Provide more details.
Bank of America is the lender on the first and there is no second mortgage. As for the relationship being disclosed I'm not sure.she told the bank that. Is that a deal beaker?.

THANKS
Paul

Paul, your realtor needs to push back and fast!  The fact that your seller and agent are related is irrelevant,  the current market value and your offer are what is most relevant here.  Arms length transaction definition is getting terribly distorted lately and as long as your transaction with the seller is arms length then this sale should occur.  I would guess that the negotiator on the file does not understand arms length and can only read between the guidelines and can not think outside of the box.  Push this thing and escalate to the investor on this one.

 

Jeff is right...it probaby is someone that is new and doesn't understand arms length transactions...I had a similar deal with BOA recently where the Listing Agent and Buyer were related and we had the Arms Length and BOA denied the ss in Equator...we had to start over because the BOA rep.  kept saying you can't do it...well you can, we have done it plenty of times b/4..they just don't pay the commission...so we assigned another listing agent and reinitiated the ss and it went through...


Christina Conrad said:
Jeff is right...it probaby is someone that is new and doesn't understand arms length transactions...I had a similar deal with BOA recently where the Listing Agent and Buyer were related and we had the Arms Length and BOA denied the ss in Equator...we had to start over because the BOA rep.  kept saying you can't do it...well you can, we have done it plenty of times b/4..they just don't pay the commission...so we assigned another listing agent and reinitiated the ss and it went through...
Thanks for all the great advice, I will forward your replies to my Realtor.

I appreciate your help!!!

Thanks again

Paul
I'm going to blast this out in the newsletter today., Lets' see what our members have to say

Bank of America has a standard Arms Length Affidavit.  So if it was not disclosed in the beginning they would find out later.

They are constantly hiring and always seem to have a constant stream of inexperienced employees.  

 

More and more they are also using Asset Management companies so who knows their experience or guidelines they are operating off of. 

Here are some of my recommendations:

1. Ask the Realtor(R) if they will allow you and your Broker of Choice to meet face to face with the Seller
to discuss the matter (if at all practicable).
2. Find a Short Sale Superstar in your market that will agree to:
a. Meet with you and the Seller to talk about the next steps required, including exposing the property to the market as required by the regulator, and
b. Act as a Dual Agent, and
c. Re-open the case for the Seller, and
d. Submit your Offer to Purchase to the Lender/Investor.

There are certainly other steps that a Short Sale Superstar would likely recommend
if you have not already taken them e.g.
a. Complete a Home Inspection,
b. Have the Broker complete a Broker Price Opinion,
c. Estimate the cost of repairs
d. Your Short Sale Superstar will research and determine if there is an established minimum offer required for that sub-market by the investor in order for them to agree to review the contract. 

At that point, you will have made some reasonable progress towards achieving your objective.
Bear in mind that the Agent with share the facts as they know and learn them, but it will be up to you to decide on how much to offer.

There are probably as many different ways to handle this situation as there are Brokers, so while this was just a brief overview on some of the steps that I would recommend, I'll observe some of the additional Superstar Feedback and chime in again soon.

All the Best to You in your Short Sale Endeavors!

Scott Korbin, MBA
Broker In Charge
Triangle Home Masters
(919)677-9911
http://www.TriangleHomeMasters.com
Jeff,

I disagree with your assessment. Most regulators, if not all, deny contracts where a relative of the Seller will receive any benefit from the Short Sale. The possibilities of the Seller benefiting from the Short Sale financially are obvious.  I could be wrong. I often am. But I would find a Broker who is not related to EITHER party. Please take no offense, but I have never known an investor to approve a Short Sale transaction knowing that there was a relative involved as the Broker for the Buyer or the Seller.

Jeff Payne said:

Paul, your realtor needs to push back and fast!  The fact that your seller and agent are related is irrelevant,  the current market value and your offer are what is most relevant here.  Arms length transaction definition is getting terribly distorted lately and as long as your transaction with the seller is arms length then this sale should occur.  I would guess that the negotiator on the file does not understand arms length and can only read between the guidelines and can not think outside of the box.  Push this thing and escalate to the investor on this one.

 

I agree with you Scott - many times I've advised a buyer/agent that he will not be paid a commission if he is party to the contract.  These negotiators look for same name, etc etc -

I thought we (Realtors) had to disclose to the parties (of the contract) our relationship, if any, to the other parties - isn't that still the law (FL)?

Some lenders are very firm with the ALT - Fifth Third turned down a cash offer on a vacant lot (assessed value) because the buyer was the girlfriend of the sellers adult son.  Seriously?  Vacant lots just aren't getting a lot of action in this area of FL but Fifth Third wouldn't back off their position.  The lot remains unsold and of course, not yet foreclosed. 

 

No commission certainly would help, but the BPO would have to come from a 3rd Party or you'd have to order an independent appraisal. Better yet, avoid the Arms Length in all matters. JMO.

Paul Silva said:


Christina Conrad said:
Jeff is right...it probaby is someone that is new and doesn't understand arms length transactions...I had a similar deal with BOA recently where the Listing Agent and Buyer were related and we had the Arms Length and BOA denied the ss in Equator...we had to start over because the BOA rep.  kept saying you can't do it...well you can, we have done it plenty of times b/4..they just don't pay the commission...so we assigned another listing agent and reinitiated the ss and it went through...

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