I have a situation where the seller has accepted a offer. Another agent has brought in a offer that is not as good as the first. The seller doesn't care since the 2nd offer is from a friend. Help?
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On a recent shortsale, I received 2 offers. I then sent each a "multiple offer" form requesting their best & final offer. The offers were $40k apart. My seller accepted the low offer because he hates the people who placed the best offer. I asked the lender if I could submit the better offer & was advised "NO" because it didn't have the seller's signature of acceptance. They told me it wasn't my fault & not to worry about it. The lower offer was withdrawn because they found another property. The seller said if the higher offer would pay him money on the side he would sell it to the best offer. I told him that was FRAUD and I would have no part of it and released his listing. I believe it is getting ready for a sheriff's sale now.
Joleen -
Good for you !!! Doing the RIGHT thing is always the best thing..
Thom
Susan,
So here's a thought because I know you must feel like you're stuck in the middle and you want to do the right (legal) thing.
Explain to the seller that they are "in contract" to sell the property to Buyer #1 with a contingency that the bank allow the short sale.
(I know you've already done that but do it again....)
As you know there are only two ways for contract #1 to be cancelled; 1) Buyer #1 walks away; 2) Bank rejects short sale. In either of these cases, Buyer #2's offer could then be accepted and presented to the lender.
However..........
Here's another thought about how you can handle the situation. The Seller can accept the offer from Buyer #2 as a "BACKUP" offer - make sure to note BACKUP OFFER on the contract. Then, you could present that offer to the lender along with an estmated HUD for that offer and a cover letter from YOU explaining the offer is not as financially beneficial to the lender as the original offer - AND explaining this offer is NOT an Arm's Length Transaction. My bet is you will never hear anything back from the lender regarding offer #2. Keep the Fax Confirmation or other documentation showing you presented it to the lender, date, time, etc.
The only reason I suggest doing this proactively is because;
1) there is nothing that prevents the Seller from authorizing Buyer #2's agent from speaking with the lender; and
2) there is nothing preventing the other agent from sending that offer directly to the lender themself !
I've been in a similar situation and the agent on offer #2 sent their offer directy to the lender. That caused me to have to explain why I had not presented it to the lender - even though it was a terrible offer (25% less than the original) as compared to the original accepted offer and was never accepted by the seller.
With everyone trying to make a living, I see more and more agents sending their client's offers directly to the lender with the expectation it will be accepted by the lender. They seem to forget the lender is not a party to the contrtact - only the Seller and the Buyer are....
Best of luck!
Thom Colby
CA-Broker
Is there a short sale addendum in your state that deals with this? In CA, there is a short sale addendum that allows the seller to accept multiple offers and submit them to the bank for approval.
The arms length is an issue that should be addressed. It is rare, but this can be waived by a lender in certain situations.
The CAR PAA 1 form is not as simply as just accepting multiple offer as you make it sound. Plus the arm length disclosure puts this offer in question because of the relationship and it being lower than the 1 st accepted offer, could get messy and a waste of time for all involved.
xx
The first buyer has to agree to cancel. the seller is stuck with 1 offer unless the first buyer agrees to release him.
The Arms Length is critical for your Seller to understand. FRAUD is a huge deal!
If your offer is executed and signed, then you COULD sue for interference, but it's likely not worth it.
The seller can accept the 2nd offer but it would have to be contingent on the 1st one not working out. They can't sell their house to 2 buyers at the same time. Trying to sell to a friend for less money is EXACTLY why the lenders use an Arm's Length Transaction Notice. You need to explain these things to the seller. If they still don't get it then you may need to just cancel the listing and walk away. We can't help everyone.