This is the 4th short sale we have tried to get, and the only one who accepted our offer.

Two weeks ago we placed a full price cash offer on a house that has been on the market for over 149 days.  AFTER we placed th offer, our agent found out that there had been two previous offers.  One was low, and GMAC turned it down.  The other offer was for $10K over asking, was approved, but the buyer found another home, and dropped out.  The agent explained she can't take the home off Active because of a clause in her contract with GMAC.  This makes us nervous.  We could raise our offer to the already approved price, but we fear they will come back even higher since we are showing so much interest in the property.  Meanwhile the house can be shown, and other offers taken, I guess.  What to do?

Does GMAC keep all properties Active in the MLS?

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Get a new Agent!!

ditto!  ...

With respect, everybody seems to be assuming that this is a valid contract simply because the buyer and seller have signed off on it. That's not always the case. You have to know your state laws concerning short sales. In NC, for example, our short sale contracts specifically state that a) the property must be kept "active" and listed "for sale" until the 3rd party lender gives written approval of the offer, b) either party may cancel the contract without penalty for any reason prior to the 3rd party lender's written approval and c) gives notice to the buyer that there may be more than one offer on the property and the seller can choose the highest/best offer to present to the lender.

Hey Roger, I don 't see any problems with  a) and c), provided that in a) it would be disclosed in the MLS.

But, b) seems crazy.  Why would any Board place this requirement on it's members.  Is it actually enforceable by the Board?  They're telling me my seller Must sign a contract that lets the buyer walk away, at any time, for no reason, right up until the approval letter is issued (60, 90-, 120 days)? When my seller is in foreclosure, approaching an auction date, do they really think I'm going to let my seller sign that contract then get "hung out" when the buyer walks away just prior to auction?  Do they think I'm going to let my Buyer sign a contract that the Seller can cancel after 3 months, so he can sell to someone who is also "buying" his microwave for $1,500?

I understand, and agree, that Realtor Boards should adopt reasonable standardized procedures.  But, they're really going to tell my Buyer/Seller they Must sign a contract that is essentially unenforceable since it lets the other party walk away, at any time for no reason, with no penalties?

Do most of your fellow members feel like your Board Is Insane!!??

Okay, that's my Rant for the year...got it out of the way early!

I agree with your rant - Wayne. I have no idea who wrote the contract Roger is referring to, but I would not use it. In fact, I go quite the other way when it's my listing and I have a buyer. I make sure they're serious, and I ask them to sign a statement stating the deposit is non-refundable. That's how I know they're a serious cash or financed buyer who will hang in for the long haul, if necessary, and then I go to work. If the buyer is not serious about stealing a house, because let's face it - they are getting it cheap, then why would I waste my or my seller's time tying up the property with someone who can walk without penalty?  ...Hell NO!  I would find and use another contract, or have another drawn up. A contract is any agreement signed by both parties and is valid upon consideration. There is no law anywhere that states you, in NC, have no right to create any other contract that better suits you and your clients. Otherwise, I suppose, there wouldn't be any need for attorneys in NC.  ...

Yes, but only one offer is submitted to the bank at a time - even in NC. Again, it hinges on that agent and whether she or he is submitting "all" offers to the bank, or are they being submitted in the order received or by a deadline date posted by the list agent so that the owner can choose highest/best.  So, even in NC, it doesn't matter. It is a valid contract and waiting for the "subject to" clause to be fulfilled. Just because a) the property must be kept "active" and listed "for sale" until the 3rd party lender gives written approval of the offer - doesn't meant that "all offers" are submitted to the bank. It simply means that the list agent needs to keep all offers - filed. Only one is submitted to the bank.  

Keeping the property active why it's actually contingent may be an NAR ethics violation.  It was actually a question on the recent ethics test.  So I guess you could tecnincally be in compliance with State Law and have a ethics violation complaint levied against you.

http://nvar.com/index.php/law-ethics/article/listing_a_property_as_...

This varies widely by state and region.  Where I am at (in VA), as of last year, all short sales must be pended within 48 hours once under contract (while waiting for short sale lender approval).  The agent will get fined otherwise for a MLS violation if it is is not immediately corrected upon notification. This rule is consistently not followed.

I've never run into any problem with a short sale lender for doing this.  Here you also can not be in a contract with more than one buyer (i.e. you can not sell your house twice).  Agents are rampant with back-up contracts which state they are in effect if 1st offer falls through.  They are not valid here even though they are done.  An offer can be presented and not signed by both parties and held until the right time- that is just fine.  Legally, a seller can not be in a contract with 2 different parties for the same house- it doesn't matter what the contingencies are....at least that is the case here.

At a minimum the agent should have updated the listing to indicate an offer has been accepted by the seller and is awaiting third party approval.

As Wendy stated- agents must follow MLS rules.  We've seen it too many times here- MLS overrides anything the short sale lender wants.  It makes life easier for all the buyer agents who when they search for ACTIVE listings are able to show buyers homes that really are available and not under contract.

Agreed - you cannot sell your house twice! An Agent / Broker must make sure the contract states something to the effect that allows an "if/then" possibility and consequence. The banker who told the agent she must keep the MLS "active" is wrong - and, as mentioned in one of my above rants, if it were me, I would have corrected this person asap. ...and if the agent is really that meek... also mentioned above - it's time to get another agent! 

We are the BUYER!  If the seller messed up, not a lot we can do!

I'm not suggesting the seller messed up. I'm suggesting that the agents, more than likely, have. Your agent "should," there's that word again, be working for what's in your best interest. Your agent needs to either demand the listing is either put UAG or flagged for back-ups, and then your agent "should" find out from the list agent whether "ALL" offers are being submitted to the bank. If they are, your agent "should" explain all scenarios to you, and you will need to make a decision regarding whether to rescind, as I suggested above, put in a kick-out clause and/or a deadline date, wait it out (and possibly miss out on other houses), or just plain move on. Only you can make that decision, just make sure you're fully informed.  ...I wish you luck.

UPDATE:  Today the house is no longer Active on the MLS.  Says "Hold. Do not show."   Took a while, but it's a good sign that the seller/agent is behind our offer.  Now we wait for the bank approval or counter.

Thanks for all the replies!

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