I originally wrote this post on Active Rain, "Presenting Multiple Offers to the Lender for Short Sale Approval" and was reminded today that there are still MANY out there who don't understand the difference between a short sale and a foreclosure! I actually heard on a local radio show, the commentor, who is a real estate agent, proclaim something like this, "And, YES, we present ALL offers to the bank and let them decide which one you (the seller) will work with!" Unfortunately, I could not call in to the show to clarify but, I have spoken with our NC REC attorney who agrees with 1-contract submitted to the lender, seller holds the back-ups. PERIOD!
Questions and more questions! While visiting at the NAR site regarding the new short sale designation and visiting the 'discussions' link, I found several questions relating to short sales and one, in particular caught my eye.
"Can multiple offers be submitted to the lender without seller signatures or can only one offer be negotiated at a time? Can the seller sign multiple offers to submit to the bank?"
Ahh, the question of the year! In Broker Bryant and Wendy Rulnick's classes (visit www.ShortSaleSuperstars.com
) on short sales, we learned that we only submit one offer at a time. Numerous articles and webinars that I've seen during the last year also instruct agents to submit only one offer at a time. However, repeatedly, this question arises in our day-to-day business. Just yesterday, a client of mine who is selling a beach property informed me that it's been months and they have heard nothing from the bank--he said that they just could not understand because they had presented several GOOD offers to the bank! When I questioned him further, he explained that his agent had informed them that this is he way that she was supposed to handle this but, cannot tell him why the BPO has not been ordered or the bank has not responded. He asked me my opinion.
Short Sale or ForeclosureHere is my best understanding of this process:
A foreclosure property is owned by the bank, therefore, just as any client, we are required to present all offers to the bank for their evaluation, review and subsequent acceptance.
A short sale property is still owned by the homeowner or said owner of record, NOT the bank. If we receive multiple offers for a short sale:
* We present them all to the SELLER
* We review each of them with the SELLER
* We assist the SELLER in determining which Offer carries more weight--
o Is the buyer prepared for the lengthy short sale process?
o Is the agent willing to work with us during this long process?
o How qualified is the buyer--if the bank were to counter this Offer, would they qualify for a higher mortgage or is the buyer at their maximum?
o How 'clean' is the Offer?
* Evaluate all aspects of the Offers and compare them, selecting the strongest
* Remember that the strongest Offer does not always mean the highest sales price!
* Keep the cleanest & best Offer and have the sellers sign and return copy to the buyer
* NOW, submit the entire package including hardship letter, financials, comparables, etc. with THIS ONE ratified Contract to the Lender for their approval.
* Begin the
short sale process.
Sensory OVERLOAD!Once again, this is only MY understanding but, I have not spoken to one short sale expert who submits multiple offers. Instead, it has been my experience that if multiple, unsigned (by the seller) offers are submitted to the bank, nothing is ever done with them and this is a sure sign that the property will be foreclosed upon if the seller is unable to make their mortgage payments.
I would love your opinion as I know that many areas of the country have done far more short sales than we have here in Charlotte NC and I value your knowledge and expertise.
One thing that I know for sure with regards to the agents questions is that you don't submit multiple SIGNED offers (by the Seller) to the bank--you can't be 'under Contract' with multiple, independent buyers at once! The other part of the question, I get weekly from someone and would like to be able to confidently answer as to, "Can you submit multiple, unsigned Offers to the lenders for approval on short sales?"
What say YOU?
Debe in Charlotte