Multiple Offers on a Short Sale Listng

Once an executed contract has been submitted to the lender and another offer is submitted on the property, how is the 2nd offer supposed to be handled? Obviously present the offer to the seller but:

Does it HAVE to be presented to the lender? Even if unsigned or higher than the 1st offer that the bank is currently processing?

Or are you supposed to hold all offers as backup offers until the 1st offer is processed?

Or is it the sellers decision?

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Permalink Reply by Ken Ryan on October 8, 2012 at 9:16am

I generally agree with the previous comments, BUT, in Az., we have a Short Sale Addendum that is submitted with the original offer and unless the buyer and seller modifiy terms in said addendum, the addendum requires any offer submitted to seller and if the seller elects to accept said offer, then said offer MUST be submitted to Seller(s) creditor(s) within 5 days from seller acceptance.

Permalink Reply by Jim McCormack on October 8, 2012 at 9:22am

We have a similar clause in the Tennessee Association of REALTORS Short Sale Addendum. It reads:

"Right to Continue to Market Property. The parties agree and understand that the Third Party Creditor(s) may require 30 the Seller to continue to market the Property and continue to submit additional offers and/or back-up contracts to them for approval, even after Buyer and Seller have agreed upon terms and submitted their contract for approval. This process of receiving multiple offers may cause significant delays in the approval process. Buyer and Seller hereby agree that Seller may continue to market the Property and may submit any additional offers and/or back-up contracts to the Third Party Creditor(s) for consideration even after entering into this Agreement."

Simple solution: Buyer and Seller agree to cross out the paragraph. I am a short sale expert.  It is my job to know when verbiage like that is a disaster and will cause short sales to fail and make the appropriate recommendation to my Seller and Buyer clients.

Permalink Reply by Toni Nicholas on October 8, 2012 at 7:19pm

Right - not to mention that any "clause" written by any local "REALTOR" board does not mean it's your state's law. The REALTOR Association is a private organization which has nothing to do with being a Licensed Agent or Broker in your respective state. 

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