Replies to This Discussion

Permalink Reply by Kent Dills on May 19, 2010 at 2:10pm

Susan, pardon my frankness but the seller is under no obligation to continue to negotiate with you and your buyer, and neither is the bank. The bank countered your offer and that immediately was the same as saying no to your offer.

You and your buyer are under no obligation to meet the bank's counter either. It's just an offer. Which you countered. Which was the same as you and your buyer saying no to the bank's offer.

If the listing agent has an offer in hand that nets the bank more than your counter of $122,500, it would make sense to submit that offer and not your counter.

IMHO ;-)

Permalink Reply by Susan Georgeson on May 19, 2010 at 2:14pm

Thanks Kent. I appreciate your prompt response. I posted this question here because I sincerely want to find out what the proper procedures are for this circumstance. I'm sure there will be a lot more of it in my future.... Thanks again.

Permalink Reply by John Edelman on May 19, 2010 at 2:32pm

I agree with Kent. A short sale is a transaction between a buyer and a seller but contingent upon the approval of the lien holder or servicer. Even though you had an "executed' contract between the buyer and seller - the counter from the bank is essentially their saying "no" to the contract that has been presented. Therefore, the seller is no longer under any obligation to pursue your offer any further. And if they have another offer that they feel may be acceptable to the lien holder - they are free to submit and work that offer. This new offer would not even be considered a back up in this case because the lien holder has already essentially rejected your contract.

Permalink Reply by Katerina Gasset on May 19, 2010 at 2:50pm

Susan- As soon as your buyers did not accept the counter from the seller, you were no longer in contract. When your buyer countered that counter- your buyer was then in essence putting forth a new offer. This opened it up for the seller to be able to then go to a back up offer.
We have a clause in our contracts that says that our sellers have the right to withdraw from the offer if they do not like the terms the bank gives to them. What if they don't have 10K to contribute. If I was the sellers agent I would be looking for an all cash offer with a buyer who could come to the table to help him out with the 10K.

Permalink Reply by Susan Goulding on May 20, 2010 at 3:53pm

Susan - I'm not sure what state you are in. I do 2 things in CA to combat this problem.
1) our Short Sale Addendum - I ask that item e - that state that the seller can send additional offers to the bank DOES NOT APPLY -- this is signed by the seller, and I make certain that the listing agent is aware of what I am countering out.
2) I also type on the addendum - "that the buyer has EXCLUSIVE FIRST RIGHT OF REFUSAL to respond to any request from the bank.

Far too often I've had sellers accept my offer to get the ball rolling only to come along with THEIR OWN BUYER thus double ending the deal once an acceptance has been given.

Personally I say "FOUL" your buyer has waited who knows how long, they at least should be able to TRY and negotiate with the lenders request.