Multiple offers
I literally just finished uploading a short sale offer into Equator (all the documents and everything) when I get a second, better offer over the fax. Now what? I don't see any way to upload the new offer through Equator. Do I just go forward with the lower offer (which I don't think BA will take in the first place)? Thoughts?
Replies to This Discussion
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Permalink Reply by Steele V. Propp on
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You should only be sending offers accepted and signed by your seller. A better second offer is too late.
Just like in a normal sale.
Steele -
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Permalink Reply by Jim Stewart on
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Yeah, that was my thought. Have the seller accept it as a back-up offer only. My concern is whether I have some obligation to present it to the lender as well since their approval is needed to close the deal. Make sense?
Steele V. Propp said:You should only be sending offers accepted and signed by your seller. A better second offer is too late.
Just like in a normal sale.
Steele -
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I understand the concern but the lender is not a principal to the transaction. You have no obligations to get a particular number for them. You work for the seller. And having them sign more than one offer is a classic short sale mistake.
I would do as you are thinking. Keep this second one as a back up.
My opinion, of course.
Jim Stewart said:Yeah, that was my thought. Have the seller accept it as a back-up offer only. My concern is whether I have some obligation to present it to the lender as well since their approval is needed to close the deal. Make sense?
Steele V. Propp said:You should only be sending offers accepted and signed by your seller. A better second offer is too late.
Just like in a normal sale.
Steele -
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Permalink Reply by Bryant Tutas on
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Jim, The reason there is no function to upload another offer is because lenders only want to see contracts. And of course you can only have one workable contract at a time on a property. One of the keys to a successful short sale is to negotiate the highest and best offer you can before the seller signs off on it. Buyers love to low ball short sales. Our job is too tell the sellers to reject them. Unless of course they are facing an imminent foreclosure auction.
Steele is absolutely correct. "Just like a normal sale" -
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Permalink Reply by Susan Stuth on
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Jim,
You need to very careful about that. We have been advised by Bruce Aydt, legal council for Prudential Realtors and writes the legal advice column in NAR's magazine that you can only accept one offer. You can take multiple back up offers but you are only allowed to show them to the bank IF they reject the first offer. He is one of the trainers of NAR's new SFR designation.
We are starting to here about lawsuits being brought by buyers who had the original accepted offer so you need to be careful with what you are doing. I don't want to see anyone get in trouble down the road because of any of the banks.
Susan -
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Ok, everyone, let me muddy the waters a little more. My local board of Realtors here (Springfield, MO) has injected language into a "Short Sale Addendum" to the contract which states in part:
"The Sale Contract is contingent upon Seller and the debt holder(s) agreeing in writing to terms that will result in the release of the debt(s) against the Property." It continues with "...and the Seller may actively pursue and accept, or may have accepted, additional offers with this same contingency, until Seller and Buyer agree by written addendum that this contingency is removed."
Is this language in our contract different from what you are used to seeing?? It sounds to me like it may be. This is the crux of where my original question comes in. Without boring you with the entire addendum, the language suggests to me that not only can I accept multiple offers, but that it is commonly expected that multiple offers will exist. In that situation, how do you determine priority?? It is VERY common in my area to see multiple offers on a short sale, sometimes as many as a dozen or more. The agents tend to price aggressively to get as many offers as possible and then let time sort it out which is scary stuff. Do you automatically go to "highest and best" once the bank issues an approval? Is there an obligation to the original signed offer? The language of the contract makes it sound as if there isn't. Do you see where my hesitation/confusion is coming from? -
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Jim,
I am in St Louis and we have the same language. But here is the question to you - how does the seller accept more than one offer on his/her house? In a multiple offer situation, whether it be a foreclosure or regular sale, they only ACCEPT one offer. Thats where it gets sticky...
I choose to follow legal advice from a lawyer who represents NAR and be safe rather than sorry. -
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Susan,
If you get multiple offers do you present them to the lender (even if they are accepted as back-up offers)? -
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If we use Equator as an example, there is no way to input more than one. The system is set up for one offer at a time. Personally I think that is a pretty good hint.
In working with REOs and lenders almost exclusively the last 7 years I can tell you from experience that the lender/asset manager was fine with knowing a back up offer was out there. But they didn't want the specific info as it clogged up their systems.
One offer at a time was the word we got.
Jim Stewart said:Susan,
If you get multiple offers do you present them to the lender (even if they are accepted as back-up offers)? -
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Permalink Reply by Claudia Pearson on
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Once the first offer is rejected, doesn't that obligate the seller to the "back-up" contract unless/until it too is rejected?
Jim Stewart said:Yeah, that was my thought. Have the seller accept it as a back-up offer only. My concern is whether I have some obligation to present it to the lender as well since their approval is needed to close the deal. Make sense?
Steele V. Propp said:You should only be sending offers accepted and signed by your seller. A better second offer is too late.
Just like in a normal sale.
Steele -
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That's the idea of back up offers. To be presented if the first is fully rejected.
But you may have to start much of the process over again. Ask the lender for direction on this scenario. -
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What does "fully rejected" mean? Once the bank has rejected the first contract, and made a counter offer which the first buyer rejected, isn't the seller then obligated to the second buyer under the signed "back up" contract?
Steele V. Propp said:That's the idea of back up offers. To be presented if the first is fully rejected.
But you may have to start much of the process over again. Ask the lender for direction on this scenario. -
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