Shady short sale
Our contract allows them to take back up offers, but I am starting to get the feeling that they have a higher offer they have taken to the bank.
My understanding was I would have the opportunity to negotiate with the sellers lender prior to them receiving a back up offer. Do I have any recourse with the sellers, sellers agents, or lender to try and figure out what's going on.
I have had zero communication or official notice from the bank.
Thanks in advance.
Replies to This Discussion
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Permalink Reply by Trong Dang on
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Trevor,
by "selling agent" do you mean the Seller's Agent (the agent that represent the Owner), who is also known as the Listing Agent?
To answer your question and address your concern, we would probably need more detials such as: what was your offer?
What is the Fair Market Value of the property?
Do you know if there is an Auction Date scheduled for the property?
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Permalink Reply by TOP END Properties on
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Since it sounds like your first offer was a super low ball ("now made a much higher offer") .. they probably have a hard time taking you seriously or have accepted another offer. The lender will not usually issue a rejection and it might just be passed to the agent via telephone or email. A seller is always allowed to hold an offer for back-up so you are not exactly doing any favors there by putting it in the contract. Even mentioning that sounds like you plan to walk away at some point.
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Permalink Reply by Trevor Keyes on
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Thanks guys. My offer was within 10% of the FMV and even though I knew it would be low, we did it at the instruction of the listing agent. Our agents agreed on a fair price, and the listing told us to start at 10% below that price. They've had the action date pushed back 3 times already and the bank had just filed for a new date.
Couple questions -
1. Should the bank / listing agent negotiate in good faith? ie. they are now all of a sudden hesitant to submit out second offer, which is for FMV plus $25,000 in delinquent HOA dues. The contract said they could take back up offers.
2. Can I contact the bank directly?
Thanks
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Permalink Reply by Jeff Payne on
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@Trevor. There are a few things that don't seem right. Your agents agreed on a fair price and told you to start at 10% below that price? Did the seller sign this contract? Did you sign the contract?
Who is the lender? Do you know who the investor is?It seems as though your idea of FMV might be a bit skewed. How did you come up with FMV? Seems quite odd that you would make an offer of 10% below FMV and then decide to go $25,000 over FMV.
To answer your questions.
1. The listing agent does not negotiate with you. The contract is between buyer and seller. The bank makes their decisions based on many things and they sadly they can do what they want as there is no one holding the banks accountable. Sounds like your first offer was a low ball to me. What was the amount of the offer?
2. Not unless you have authorization from the seller. Based on the fact that you would not know who to contact or what to say when you contact the bank, it would not be a good idea to try that.
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Trevor, to add onto Jeff reply:
As for your situation, it really depends on the Owner's situation and how good your was offer vs what the fair market value of the house is? If you've made a reasonable offer, then you wouldn't be in this situation. But if you really like the house but figure you could try to get best deal as possible by lowballing it, by all means you got it coming because any "competent" agent out there would tell you that there is a shortage of inventory across the nation and buyers are in a frenzy trying to get whatever is left. And that right now is the worst time to lowball any property you really like purchase.
Then comes the Owner's situation, if there is an Auction Date coming, you could bet the Listing Agent won't be messing around with low balling buyers, remember he represent the Owner to get the Owner out of Foreclosure, he does not represent you, the Buyer, to get you the house for as lowest as possible nor does he represent the Short Sale Lender, to get the Lender as highest of an offer as possible. Although most times it appears as though because the higher the offer = the higher chance the Lender will accept = the higher chance the Owner would avoid Foreclosure.
Then considering the Auction Date was pushed back 3 times already, chances are the bank will not give another postponement and the deal has to close before the most recent Auction Date.
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Don't forget the "lowball" offer was at the request of the listing agent. We wanted to go higher, he insisted that was the right place to start with where we wanted to end up.
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What would you have done if the listing agent said to make an offer that was 10% over list price? What does your agent say about it?
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Permalink Reply by Beverly Cibulsky on -
Short Sales in this day and age, are not for "bargin hunters" Heck, they check the value in the deal big time! It needs to back to, Have your agent do a "buyers CMA" Cash deal oh well, financed? I would want to know that the property would appraise for they buyer's lender? Agents still need to
qualify Buyers!!!!!!!! Cash well not too much a problem, But the financed buyer who wants a home? In this market, you better have a darn good agent
I have gotten a few email rejections! and Equator counters or declines, that I would consider in writin, so no, not a rejection letter per say, But docmentation for my file.
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Permalink Reply by Chuck Wartman on
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I think the actual problem here is that the HOA came as a surprise. Many time HOA are the biggest problem because the banks wont pay for them. This may have caused problems for the listing agent and the negotiator.
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Permalink Reply by Brenda Swigert on
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Trevor the bank has to have permission from the seller to speak to anyone. What you should be doing is making sure your agent (buyer's agent) is involved as working in your best interest. The listing agent has a fiduciary reaponsibility to work in the best interest of their client and can't release information to you that is confidential. Short sales and making offers are often like a crap shoot. You make your best offer and see, knowing others too can do the same. We don't know enough about your entire offer to see if there were other concerns. If there is another offer they may not be asking for inspections and that might be more appealing. Who knows. Don't get attached til you have the keys.
Brenda Swigert Realtor CDPE
Coldwell Banker West Shell
513-378-1461
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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Trevor,
I think there's a few issues here;
1) You will never see a Decline Letter from the lender. If a letter was issued it was addressed to the Seller. No one needs to provide it to you. However, if it had been approved they need to provide that letter to you.
2) Short Sale offers are CONTINGENT upon the lender's approval of their LOSS - not necessary the sale price. So, for example if you asked for closing costs, that could kill your deal and someone else could get it for the same "price" you offered had they not asked for closing costs.
3) If there's not a lot of time before the Trustee Sale, the lender is not fooling around with low-ball offers, they don't have time. Recently I've had lenders tell me not to submit a new offer from the same Buyer who made a low-ball offer.
4) You should listen to YOUR agent, NOT the Listing Agent. The Listing Agent represents the Seller (and in a way the lender). Their duty is NOT to YOU.
5) From what you have described, I expect the Seller has accepted another offer (as they rightfully can do) and that offer is now working its way through the approval process with the Lender.
6) Ask YOUR Agent to check the MLS to see if the property shows "Back-up, Contingent, or Pending", etc. If not, you can have your agent write a new offer and the Listing Agent needs to present your offer to the Seller, BUT that doesn't mean the Seller will accept it, nor will you get any answer, nor will it be sent to the lender.
7) Remember, a Purchase Agreement is between the Buyer and the Seller with a contingency of the lender approving their Loss. Neither the agent, broker or lender is a party to the Purchase Agreement - ONLY you and the Seller.
If you were ultimately willing to pay FMV plus $25K in HOA, why didn't you make a stronger offer to begin with? You may have derailed your own deal by being so aggressive / low-ball.
No, you could not speak with the bank directly unless the borrower / seller authorizes you in writing and sends it to the bank - and why would the seller do that - there's no reason. It sounds like there were other offers just waiting on the sidelines.
Finally, I think you need to look for another house. Learn from this process. Listen only to YOUR agent. Make sure the agent you are using has successfully closed many short sales.
Short sales are becoming more convoluted, difficult, and the rules are changing every month and are never the same from one lender / servicer to the next.
Good luck,
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Was it actually a contract, i.e., fully executed by the Sellers and by you? If so, and it was rejected by the Seller's lender, then at the least you should get some sort of communication via email at least, that states that the contract has been rejected by the Lender. Usually there is a reason why but the terms of the contract usually don't dictate that you as the Buyer are going to be furnished with that.
People are guessing about why the offer was rejected and it really doesn't help you with guessing. Too low of an offer? Maybe. Seller's lender not relieving the Seller of the liability for the remaining debt? Maybe. Seller having second thoughts about the process? Maybe. Someone else back-seat-driving the Seller? Maybe. The possibilities are endless because the elements involved with the short sale are so numerous.
The real question is, do you still have any chance at purchasing the house? If the answer is no, then move on and find something new.
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