Shortsale then Flip , is this allowed ?
I just took a property off the market after receiving an offer , the offer is a low ball but what the heck , I felt at least it will get the ball rolling to submit package to bank since they did not want anything without an offer.
One week later I get a call from another agent that has a buyer that will pay 25K over what we get the home for and wants to get it in writting.
Can this be done ? , do I have an obligation to contact bank and let them know their is another interested party ?
neither offer would be enough to make the bank whole , so the seller could care less , the seller has filed BK and included the note , the BK has been discharged .
I would want to relist the home the same day of closing and re sell it to the new buyer
I feel the bank has had ample to time to do its due deligence and determine the price of this home and if they accept an offer it does not matter if someone comes the next day or the next year and offer more
What do you think ?
Replies to This Discussion
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Permalink Reply by Julianne Thorne on
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Absolutely not! Do I hear 'Fraud'? Second buyer's offer needs to be presented to the bank. Work with that buyer/buyer's agent to get it presented. Some banks have a 90 day hold policy anyway, with paperwork snuck in towards the end of the process. Better safe than sorry. You know in your heart it does not seem right - otherwise this question would not be raised. It is definitely not worth the monetary and time loss from a fraud charge, or potential loss of license......
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Permalink Reply by Smitty on
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Julianne, you can only have ONE executed contract at a time on a property. Anyone in second position goes in BACK UP. You CANNOT submit all offers to the lender or you can face huge lawsuits. A short sale is like ANY other sale, only the lender approves the terms and sale price. Flipping is legal if disclosed.
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I mis-spoke. Offers are submitted to the sellers, of course....that is a given. Any subsequent submissions to the lender are back up contracts. Each state has it's own protocol. In Texas, we have an Addendum that is attached to the contract. In our state, each and every written and valid offer is to be presented to the seller. It is up to the seller if they desire to enter into a back-up contract. The agent's duty to her client is the most important. Under the circumstances as presented, I would summize that seller would want to know about the back-up offer.....if their agent can procure one and present something real and valid. Any buyer can blow smoke and say anything they like....putting it in writing and getting it up the chain is another matter entirely...
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Permalink Reply by Jill P on
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Right, THE SELLER sees all offers. The bank is not the seller. If there are multiple offers, then there is period of time when the seller is reviewing offers before the seller signs and accepts one. Then the seller's agent submits the signed one to the bank. Obviously, the best one gets submitted.
THE BANK doesn't have the right to make these demands. The 90 day flip rule is a financing rule that is more relevant to the new buyer getting a loan, not a selling (short sale approval) rule.
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Permalink Reply by Tara Nagelhout on
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You CAN submit all offers to the bank. That doesn't mean they are all ACCEPTED.
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Tara, you face serious liabilty by submitting all offers. ONLY A FULLY EXECUTED P&S should be submitted to the bank. You work one offer at a time. The seller or buyer can SUE you if you interfere with the first signed contract. You should NEVER EVER submit all offers. Read up on tortious interference of contracts.
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Smitty, our state is requiring that all offers are sent to the bank. It is their new thing.
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Permalink Reply by Jeff Payne on
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Tara, I would be very careful sending in offers, an offer is just that. Accepted offers are a totally different animal, that is the sellers decision and anyone who is telling the seller to send in ALL offers is going to have issues later on down the road in my opinion. I have no problem taking back ups and if we do, all parties are agreeing in writing that the back up will NOT be submitted to the bank until first offer is exhausted.
Just a question, if you are dealing with BofA, how do you submit your back up offer? Equator is only capable of working one offer.
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I have three current BofA shorts and none of them are going through Equator. However, the state suggests we fedex or USPS with delivery receipt. Their theory is that we are opening ourselves for liability down the road if the buyer gets hit with a deficiency or tax consequence and there was a higher offer which would have reduced their liability.
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Do they require it or just suggest it? Have you ever actually sent a package via Fed Ex or USPS?
I would think that you would open yourself up to liability if you did not refer the buyer to a CPA or a tax attorney BEFORE they sign a legal document.
Again, I would love to see what your state has to say, can you post it here for us?
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Permalink Reply by The Negotiator on
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Jeff, I would bet that they are only "suggesting" it. How can they force this on Realtors and homeowners ... it doesn't sound legal and they could be sued for it.
Tara, I would love to read the rules you are referring to. Can you post the link or copy and paste the words?
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The bank IS NOT THE ONE WHO ACCEPTS AN OFFER!! The bank approves the offer and that's it! The bank is NOT A PARTY TO THE CONTRACT! It's illogical to think that the bank needs to see every offer and pick the one they want since they are not a party to the contract.
You can do anything you want to, but, I prefer doing things the legal and proper way.
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