Replies to This Discussion

Permalink Reply by Tracey Martin on March 30, 2010 at 9:11am

I agree with Judy. Any offer accepted after the first offer is signed by the seller should be treated as a back up offer. The HOA lien should have been included on the HUD. There is no guarantee that B of A will pay it, but it never hurts to ask. In the meantime the listing agent should get the seller's permission to talk to the person in charge of the HOA. The listing agent should try to negotiate a release of the lien. They can release the lien with out releasing the obligation. They can also try to get the amount owed to the HOA reduced to an amount the seller can pay. The listing agent needs to know that that lien must be removed, one way or another, in order for the sale to go through. Good luck.

Permalink Reply by Alan Remigio on March 30, 2010 at 9:12am

Wow! Seen this many times with agents who have little or no short sale experience. It is my understanding that, if the seller, through the listing agent accepted your offer, with consideration, that is the only offer that should be exposed to BofA, or any lender, until you withdraw.

You have an agent representing you. Your agent, looking after your best interests, in this matter, should discuss your position with the seller's agent and demand (maybe a strong word) that the seller's agent expose your contract, only, to the lender. Even if BofA demands to see all offers, it is unreasonable to provide that relief to them because it certainly jeopardizes the good faith contract between the buyer and seller and may put the listing agent in a regrettable position should the agent comply with BofA's demands.

Now addressing the inexperience, the seller's agent should seek the broker's assistance to resolve the matter. You have an RE agent working for you. That RE agent should be pushing for a conclusion to these and other challenges. Meet with your agent express your concerns, get a full understanding of the situation and discuss solutions. Any professional agent will be able to give you good advice and alternatives. Good luck!

Permalink Reply by Pacita C Dimacali on March 30, 2010 at 9:34am

According to you, the Sellers have accepted the offer and signed the agreement, pending short sale approval. But the contract is not ratified until the short sale lenders approve and accept that offer in writing.

Did the listing agent send the entire short sale package (which should include the purchase agreement) to BOA? That would have triggered the short sale process.

If you have a short sale addendum like we do in California, you may have specified that your offer is good through a certain period of time. If you're within that time frame, then you would be in the first position.


However, and depending on the negotiators, some will only want to see the best and highest offer. Others will want at least two. If you are in the first position, and another offer comes in, the negotiator may ask the buyers if they would like to amend their offer and give it your best and highest.

In short sales, there are absolutely no guarantees. Which is why, when I represent buyers, we never really stop looking at other properties while we wait for approval. I heard of one situation where the buyer waited for 8 months, only to be told that the short sale was not approved.

Good luck!

Permalink Reply by Sam Purtle on March 31, 2010 at 7:48am

This issue is at the heart of a great debate among real estate practitioners:

It is common for agents with little knowledge or experience to make mistakes. If the HOA lien was not on the HUD-1 it should have been and it is not too late to remedy.

The larger mistake that the listing agent is making is submitting secondary offers to the lender. The short sale listing should be treated as a 'normal' transaction in that once the seller accepts the short sale offer the listing should be placed in pending status and all subsequent offers should be treated as 'back ups' even if they are higher in price.

The National Association of Realtors (NAR) has a wealth of information available at www.realtor.org/shortsales and there are several postings discussing this very issue. I would direct not only your agent but the listing agent to the following - The NAR Short Sale Process Guide at the following link (requires a Realtor Login): http://www.realtor.org/MemPolWeb.nsf/pages/ShortSalesWorkflowWMDown...


An excerpt of the Guideline is as follows:
b. Subsequent Offers.

i. There are different opinions and practices concerning whether to submit all offers received to the lender, or whether to limit the submission to the first offer the seller accepts. Many lenders will require in writing that all offers be submitted, as a condition of reviewing the short sale package. Consult with your broker concerning the broker’s policy regarding subsequent offers. Remember, once again, that all offers must be submitted to the seller, even if they are not then submitted to the lender.

ii. In some areas, agents are simply submitting all offers to the lender without having the seller negotiate or accept any particular offer. Recognize that, without an accepted offer signed by both buyer and seller, you will not have a contract even if the lender approves. This approach presents certain practical and risk management issues. Consult with your broker about this practice if it appears to be common in your area, or if you are inclined to follow the practice.

Your listing agent should discuss this issue with his/her managing broker and have that broker discuss the situation with the listing agents managing broker if they truly want to leap frog another offer over yours. This issue is discussed here: http://www.realtor.org/rmosales_and_marketing/articles/2009/0903_sh...

Lastly your posting indicates that your offer was submitted via the Equator System. There currently is no way that I know of to submit another offer while a short sale is under negotiation on the Equator System. They would have to call and have your transaction cancelled in order to initiate another offer from a different purchaser.

Bottomline is that Realtor best practices indicate that short sale transactions should resemble as closely as possible a traditional buyer experience. This means that the Seller can only sell a property once and should not accept more than one offer to purchase. Other offers can be countered as 'backup' offers but only one offer that should be presented to the lender for short sale consideration.

Another consideration is what rules and regulations are imposed on the listing and selling agents by their MLS board, State and Local Realtor associations, etc.

Permalink Reply by Michael Davis on March 31, 2010 at 11:52am

It shouldnt unless there is something specifically allowing this in the contract and that seems highly unlikely. Unfortunately this is a rookie short sale agent mistake. Agent should go with the contract, they have. It is a contract, right? Not just an offer?

Permalink Reply by Sugarcicle on March 31, 2010 at 2:49pm

Thank you all for your information. There is indeed a contract, signed by both the buyer (me) and the seller. We're on our second extension already. So what the Listing Agent submitted was the actual contract, not just an offer. As for communicating with the Listing Agent, she's been very short and curt with my agent. I've had my agent ask her about both the HOA lien and the other offer, and the Listing Agent has failed to respond regarding either issue.

Sadly, I don't have much confidence in this working out. I'm hopeful, but not quite comfortable with the way things are being handled. Thank you all for your input, though. I'm glad to know some agents out there actually know what they are doing.