I have an offer on a short sale that the seller approved and we are still waiting to get something in writing from the bank...it has been 5 months.....Another short sale just came on the market that looks very appealing to us. Can we make an offer on it...and can we be the offer in first position for more than one short sale if the bank has not given us an answer. My realtor says we would have to withdraw our first offer but another friend who is a realtor says we could have 2 houses under contract and whichever one the bank answers first we could go with and then cancel the other. Who is right???
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You can have multiple offers on as many short sales as possible regardless of what the contract says if you write the offer correctly. The reason why you can do this is for the following three reasons:
1. There is usually a short sale contingency which the contingency needs to be removed before the contract can be executed.
2. If any of the terms of the purchase contract change, then you no longer have a contract. So ask for things that will usually get rejected, like a home warranty to be paid by seller.
3. Worst case scenario, you make an offer on the second house and it gets approved by the seller and the foreclosing lender on terms you agree with. Now lets assume the first house gets approved as well by the bank with the exact same terms as you submitted, such as home warranty. You still can withdraw your offer on the first house as you have many contingencies to do so. In my state of California, there are 7 contingencies we can use. One that will work for you might be a loan contingency. Since you are getting a loan on the second house, maybe you no longer qualify for a loan on the first house. You can use a buyer inspection to back out as well.
I guess it all comes down to how smart the listing agent is to try to lock you down and how smart your agent is to protect you. My clients write as many short sale contracts and we go with the first one that works out on the terms we agree with.
I would look to see if your short sale addendum has expired. If it has then feel free to write. It is bad karma to write on more than one short sale. You are putting a seller in jeopardy of a foreclosure.
I hate it when buyers agent tells me after I get approval that they are walking. After all my hardwork getting the approval all that is missing from my files is the paycheck.
Well, as agents, we are supposed to represent the best interests of our clients. As a listing agent in a short sale, I try to lock down the buyer. As a buyer's agent on a short sale, I try to protect my client from the listing agent and from missing out on an opportunity to purchase a home.
Melissa
As a buyer who has waited 5 months already...I don't feel much loyalty to the listing agent or the sellers who I am sure aren't in any hurry to leave their rent free situation....and the listing agent has been uncommunicative through this process...if he had been filling us in all along we would not feel this way. I realize most members of this forum represent the sellers...from a buyers perspective because of our lack of knowledge as to what is going on we feel this could fall through for us at any time. I doubt that the seller cares about our situation at all...they have back up offers. So should we care about their situation? It sounds cruel but true.
Short sales are inherently evil. There is no real solution. Like you stated, you need to look out for yourself and you are not responsible for the seller's hardship. I don't think it sounds cruel, it is just the facts.
If you do make an offer on the “next” house, you must disclose the material fact you have a pending short sale agreement on another home. If not, you, and your agent could possibly be sued.
I am not a fan of making multiple offers on short sales; simply because most short sales have a foreclosure looming in the distance. It is not like a regular sale in as much as the seller can remain in the home and search for a new buyer. If a property has a pending offer, that fact is disclosed, and the showing/marketing becomes on that home is pretty much non-existent. Dropping out at the last minute because you received an approval on another home can drastically reduce the possibility of a back-up offer to prevent the foreclosure. The sellers have listed their homes as a short sale to prevent the foreclosure. I certainly would not want the devastation and concequences the seller faces on my conscience; I could not sleep at night!
My advice, if you can’t qualify and close on two homes, don’t write contracts on two homes.
When were you scheduled to close? How many days did you give the bank to respond? This should be outlined in your short sale addendum. Did you sign a separate third party negotiation contract? Do you owe them their fee if you cancel the contract before expiration? If you cancel early your escrow could be at risk, and you also could owe a third party negotiation fee. Check your dates to verify that you are still in contract.
You could place an offer on other property and wait to see which one closes first, but in my opinion your deposit could be at risk on the home that you reject.
It all depends on how your contract is written and whether or not it is still valid. If you are still under contract on the 1st property then you could be placing your deposit in jeopardy. Read the contract. And of course it's only a binding contract if you and the seller have signed and if it hasn't already expired.