What does everyone think of the post "How To Keep A Buyer A Party To A Short Sale Transaction Without A Signed P&S Contract" since comments are not allowed on that post?

Curious to hear everyones thoughts on the blog post

How To Keep A Buyer A Party To A Short Sale Transaction Without A S...

 

I have done my fair share of short sales and have always had a ratified contract in order to proceed with the short sale.  As a matter of fact, I have had documents rejected recently by Wells and Bank of America because they were missing proper signatures.

My question is this.....  If your buyer makes an offer to the seller and the seller does not sign, do you a binding contract?  The answer is NO in Florida.

Is anyone getting lender approval without having a signed contract between the buyer and the seller?  I know there are exceptions like the FHA preforeclosure sale process.

Not saying the author is wrong, just would love to hear others opinions on it and since the author does not allow comments, thought I would start a thread for comments.

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Harry my friend, I knew that you would have a great response.  Won't fly in Florida either.   I would be interested to see an approval letter from a lender without a sales contract.  I read it 3 times thinking I missed something.

Jeff - I would not send in an "offer" to a short sale lender, only a contract.  The author also states that he keeps the buyer in the "transaction" with an addendum?  Does the buyer just sign an "addendum" to an unsigned contract making the "addendum" binding with a deposit?  So many issues can arise from this.  Even if the buyer "hangs in there", the contract is subject to post-approval negotiations on terms, since there was nothing binding. How is that helpful to either the buyer or the seller? 
Good point Wendy... now can there be a contract addendum without a contract?

Sorry all. I didn't mean to disable comments. I am very interested in hearing how other short sale agents keep their buyers a party to the short sale during the approval process.

 

Keep in mind, in Massachusetts, an attorney must handle the P&S contract. We do not have title companies. As a result, most attorneys do not like to draft and negotiate P&S contracts on short sale transactions unless they know they are going to close. This way, the P&S is drafted after receipt of short sale approval.

 

For those that argue that you need a signed "contract". The offer is a signed contract because it states offer, acceptance and consideration which are all necessary components of a contract. Most lenders these days only require a signed "offer", not a full purchase and sale contract. This is merely a method to submit an offer to the short sale lender while binding the parties to a contract, via a signed offer to purchase. 

 

****IMPORTANT NOTICE****GBSS is not associated with the government and our service is not approved by the government or your lender. Even if you accept any offer to use our services, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating. You may stop doing business with us at any time.  

DISCLAIMER: GBSS IS NOT ENGAGED IN THE PRACTICE OF LAW AND DOES NOT PROVIDE LEGAL ADVICE. GBSS DOES NOT PROVIDE TAX ADVICE. ALL RECIPIENTS ARE ENCOURAGED TO SEEK ADVICE OF AN INDEPENDENT TAX PROFESSIONAL OR LEGAL COUNSEL WHEN CONSIDERING A SHORT SALE. 

Hi Andrew, thanks for the response....

You post is still very confusing to me, sorry.

For those that argue that you need a signed "contract". The offer is a signed contract because it states offer, acceptance and consideration which are all necessary components of a contract. Most lenders these days only require a signed "offer", not a full purchase and sale contract. This is merely a method to submit an offer to the short sale lender while binding the parties to a contract, via a signed offer to purchase. 

I dont disagree that the lenders require a signed offer.  What do you consider a signed offer compared to a full purchase and sale contract?    A signed offer to purchase?  I am assuming that the seller is signing this document or you do not have an acceptance of the offer, unless I am missing something.

 

I also found it interesting that the negotiator requires the buyer to perform inspections before the short approval is received. Why would any agent consult their client to spend money on a property isn't under contract?
Abraham, that is not unusual in my area of Florida. It is a good way to keep the buyer interested because it puts some skin in the game and identifies any issues that would arise before waiting to see if the sale is approved.  I think it is cheap insurance for the buyer as well as the seller.  The buyer wont have to wait to find that the property is not acceptable and lose out on another deal

Hi Jeff: 

 

I replied in the comment section of the Blog post. Thank you for your comments. I am enjoying the feedback and am always looking for ways to improve our short sale procedures here in Massachusetts. 

Jeff Payne said:

Hi Andrew, thanks for the response....

You post is still very confusing to me, sorry.

For those that argue that you need a signed "contract". The offer is a signed contract because it states offer, acceptance and consideration which are all necessary components of a contract. Most lenders these days only require a signed "offer", not a full purchase and sale contract. This is merely a method to submit an offer to the short sale lender while binding the parties to a contract, via a signed offer to purchase. 

I dont disagree that the lenders require a signed offer.  What do you consider a signed offer compared to a full purchase and sale contract?    A signed offer to purchase?  I am assuming that the seller is signing this document or you do not have an acceptance of the offer, unless I am missing something.

 

Got it, we are on the same page.  The situation that you detailed is a legal and binding contract in Florida with contingency that the lender approve the terms of the short sale.  Once the seller signs, that is a ratified contract here.
Sounds good, Jeff. Sorry for the confusion. Out of curiosity, how do you keep buyers from walking (or making multiple offers of various properties) in Florida?
Andrew, we typically ask for EMD to be non refundable for the first 90 and sometimes 120 days.  I usually don't have a problem with buyers walking but I can usually get the short sales approved in 90 days or less.  As far as the multiple offer thing, the EMD can take care of that. 
BTW Andrew, I do appreciate you not taking offense to me questioning you, that is what makes this site great and these discussions great! 

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