If SS approved by BofA and I have a buyer with a much higher offer, does homeowner have to take the lower approved offer?

Hey Gang,

Anyone run into this dilemma? I may have a SS where the initial submitted offer is much much lower than an offer that recently came in. What happens if the lender approves the sale price of the lower offer? I doubt that they will approve the lower offer but what if? Does the homeowner have to go through with the sale at the lower price?

It's still in Phase I. BPO completed.

Any thoughts?

Thanks!

Mako

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Replies to This Discussion

Makoto, This is one of the reasons why you should only submit strong fully negotiated contracts to the lender. Not offers. You stated "I doubt that they will approve the lower offer" I guess my question is...then why was it submitted? Were you up against foreclosure sale date?

Always negotiate the best possible deal you can get first. Have the seller accept the contract. Then submit for approval. Does this make sense?
+1 on what Bryant said. DO NOT send in another offer, BofA has a hard enough time with one offer, what do you think they will do with two offers?

Bryant Tutas said:
Makoto, This is one of the reasons why you should only submit strong fully negotiated contracts to the lender. Not offers. You stated "I doubt that they will approve the lower offer" I guess my question is...then why was it submitted? Were you up against foreclosure sale date?

Always negotiate the best possible deal you can get first. Have the seller accept the contract. Then submit for approval. Does this make sense?
Yes, 2 days 'til auction. My BIC is saying that I should tell them that I have a stronger offer in hand and ask BoA if I can submit that. Hmmm... I've never heard that I should submit another offer once one was already in unless the first buyer walks.

Bryant Tutas said:
Makoto, This is one of the reasons why you should only submit strong fully negotiated contracts to the lender. Not offers. You stated "I doubt that they will approve the lower offer" I guess my question is...then why was it submitted? Were you up against foreclosure sale date?

Always negotiate the best possible deal you can get first. Have the seller accept the contract. Then submit for approval. Does this make sense?
Jeff: My BIC wants me to call them and let them know that there is another buyer willing to pay more for the property. Then, it's up to BoA to say "yes" or "no" and the decision is on BoA, not me (and by extension, our company). It's my understanding that, as far as BoA is concerned , until they reject the first one, that there should be no other offers/contracts presented to them.

Jeff Payne said:
+1 on what Bryant said. DO NOT send in another offer, BofA has a hard enough time with one offer, what do you think they will do with two offers?

Bryant Tutas said:
Makoto, This is one of the reasons why you should only submit strong fully negotiated contracts to the lender. Not offers. You stated "I doubt that they will approve the lower offer" I guess my question is...then why was it submitted? Were you up against foreclosure sale date?

Always negotiate the best possible deal you can get first. Have the seller accept the contract. Then submit for approval. Does this make sense?
Mako, The truth is that this is a decision for the seller to make. Not you or the BIC. If the seller is already under a binding contract then they are in no position to accept or submit another offer to the lender. Remember the lender is NOT a party to the contract.

All you should be doing is asking them to remove the lien so the deal can close.

I agree with Jeff that submitting another offer to BofA is going to not only confuse them but may very well cause the file to be closed. BofA's guidelines state they want a fully signed CONTRACT. No where do they state they want to see offers.

Your seller needs to seek legal advice.
Makoto - Adding to what Bryant and Jeff said, which I agree with... sending in another offer may open your seller to legal problems if the first buyer's offer (which I am taking is a "contract") is set aside- outside of contract precedence. The short sale lender does NOT follow nor CARE about contract precedence. Sending in multiple offers is like running an undisclosed auction. If your seller wants you to do this, I would advise they seek legal counsel.
Bryant, Sorry, let me clarify. When I say "offer" I mean a signed contract between a buyer and the seller. It is a ratified purchase agreement. SO, what BoA has under review is the signed ratified (and legally binding) purchase contract between the buyer and the seller. Apologies for that.

I'll have the seller seek legal advice.

Wendy: Thanks for your input.

-Mako

Bryant Tutas said:
Mako, The truth is that this is a decision for the seller to make. Not you or the BIC. If the seller is already under a binding contract then they are in no position to accept or submit another offer to the lender. Remember the lender is NOT a party to the contract.
All you should be doing is asking them to remove the lien so the deal can close.
I agree with Jeff that submitting another offer to BofA is going to not only confuse them but may very well cause the file to be closed. BofA's guidelines state they want a fully signed CONTRACT. No where do they state they want to see offers.

Your seller needs to seek legal advice.
Makato. Having a fully signed contract makes the seller's decision much easier. They just need to honor the terms and agreements of thew accepted contract and work it towards closing. The 2nd offer could be accepted as a back up contract BUT it cannot be submitted to BofA unless the first position contract cannot be fulfilled.

Doing anything that would interfere with the first contract could be illegal. Submitting the 2nd offer/contract to BofA would be interfering. They just can't do it.

****Of course I am not an attorney and can not give legal advice. This comment is 100% my opinion. But that does not make it wrong :)
Makoto, I agree with what BB, Wendy, and Jeff stated below. Since the 1st offer was ratified then you should wait to hear what the bank's decision is even though you stated that it was a low offer. If they reject the offer and counter at higher price, then you have the back up which you can use if the 1st offer decides to walk.
Well here's the penny for my thoughts - Only 1 offer should be submitted to the lender until that offer is either accepted, rejected or countered. The bank has no idea there are other offers and you should state in MLS that you will be submitting 1 offer to the bank all others will be back-ups. When the bank has made a decision as to accept, reject or counter and depending on the answer you will know what to do. If the offer is accepted enough said, if it is countered, then counter the buyers if they don't accept then and only then do you send in the next highest offer letting the bank know the buyers walked but you have a new offer to submit to them and if it's as high as they were looking for in my experience they accept. Hope this helps
So if you have an executed back up contract, once the bank rejects the first contract and the first buyers reject the bank's counter offer, at that point not only is it okay to submit the second contract to the negotiator, but wouldn't the back up contract bind the seller since the contingency of the first contract no longer exists?
1 offer at a time should go to bank, if you have an approval close it.
Done end of storry...

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