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Thank you in advance for reading this and offering any suggestions you might have.
Last week we went to look at a house that's being offered for short sale. Three days ago we made the seller an offer which they accepted. The following morning our realtor sent us all the papers which were signed and returned to the sellers agent. So we were under the impression that we are now fully obligated by signing and sending our contract.
Last evening our realtor sent my husband an email tell him he'd just found out that the seller had accepted a 2nd signed contract and had submitted both to the lender. We were all stunned! Is it legal for him to do that? Doesn't that mean he is is basically contracted to sell the same house twice? And is that not illegal?
We're in MD and the other realtor is in DC. Again, it is a short sale.
Anything anyone can offer, I'd really appreciate it. We're just not sure what to do. If this is legal it doesn't seem fair. It could mean the bank takes the better offer and never give either buyer a chance to up their offer. We never thought that would be an issue since we assumed our offer would be reviewed and accepted/declined or countered. Throwing a second party in there really makes it awkward.
Not only that, but now we feel like we're unfairly tied to this whole process and we can't get out of it without losing our deposit. I would have liked to of known there was another contract before we submitted our offer as would probably of offered a bit more/our best and final. OR perhaps we would have not submitted the offer anyway. I'm not sure we want to be tied to the short sale process that long under there conditions. We want to buy a home, not sit on the sidelines for 2 months while we get taken for a ride of this realtor is playing some sort of a game.
The listing now states Contingent without kickout. The ad has been changed to read "1 lender short sale in progress. Make YOUR offer today" So that means he is still taking even more offers?
Whether it is illegal or unethical is a debate in real estate. Most short sale agents get the highest and best offer, execute one contract, and submit that offer to the bank. Just one, fully executed offer. I went to a training a couple of years ago here locally and the real estate attorney said to do exactly what this agent did. Execute all the contracts because the short sale contingency will kill one of the contracts any way. I don't do my short sales that way, but it might be that the company attorney has told the agents to execute all contracts and submit all of them to the lender. I know one company in town does exactly that. The rest of us execute one. The rest go into backup position just like any other transaction.
First, do you have a fully executed contract (i.e. do you have a copy of the contract with both your's and the seller's signatures?) Also, is there a short sale addendum or some language written into the contract that specifies that the contract is contingent on the seller's acceptance of the terms of the lender's approval, the timing of the various deadlines, and whether or not they can continue to market the property?
I have our copy of the faxed contract of sale. It has our signatures, but not the sellers. I assume -and I know I shouldn't- that the contract that was sent to the lender has both signatures. There is a short sale addendum that does state the 3rd party approval. Nothing about marketing. And it does say that they can continue to accept offers, not contracts. I understand about back up offers, not about submitting two contracts.
With the SS addendum you can withdraw your offer at any time before the bank accepts it, the addendum should also state something along the lines that the contract is not fully executed until the bank accepts it.
I have had short sales with 20 offers at one time, not unusual at all.
BTW Silverfall, I heard you were down in the low 30's the other day, My wife is heading out there soon and when her friend told her she started getting worried.
With the SS addendum you can withdraw your offer at any time before the bank accepts it, the addendum should also state something along the lines that the contract is not fully executed until the bank accepts it.
In Florida, the lender's approval is only a contingency. They (lenders) are not really a party to the purchase and sale contract. In most cases, the buyer through the short sale addendum gives the seller an approval period of x days and is therefore required to give the seller that amount of time before they can back out or extend.
It's not common in this area, but it does happen (my first short sale contract, which went to foreclosure). That said, the bank may want to see all offers, the highest and best, etc. My personal opinion, it's unethical for a listing agent to ratify more than one contract.
I have often indicated that the earnest money deposit only be deposited when short sale is approved in writing. That protects your deposit in case the short sale falls through, the contract is withdrawn, property goes to foreclosure, etc. I'm in VA, so your mileage may vary (check with your local jurisdiction and Realtor).
If you're in the situation where your financial circumstance indicates that short sales are your best bet, hang in there, and be brave. Put your best offer in (at market), and don't try to play the odds.
Quote:
Originally Posted by sadlady
Thank you in advance for reading this and offering any suggestions you might have.
Last week we went to look at a house that's being offered for short sale. Three days ago we made the seller an offer which they accepted. The following morning our realtor sent us all the papers which were signed and returned to the sellers agent. So we were under the impression that we are now fully obligated by signing and sending our contract.
Last evening our realtor sent my husband an email tell him he'd just found out that the seller had accepted a 2nd signed contract and had submitted both to the lender. We were all stunned! Is it legal for him to do that? Doesn't that mean he is is basically contracted to sell the same house twice? And is that not illegal?
We're in MD and the other realtor is in DC. Again, it is a short sale.
Anything anyone can offer, I'd really appreciate it. We're just not sure what to do. If this is legal it doesn't seem fair. It could mean the bank takes the better offer and never give either buyer a chance to up their offer. We never thought that would be an issue since we assumed our offer would be reviewed and accepted/declined or countered. Throwing a second party in there really makes it awkward.
Not only that, but now we feel like we're unfairly tied to this whole process and we can't get out of it without losing our deposit. I would have liked to of known there was another contract before we submitted our offer as would probably of offered a bit more/our best and final. OR perhaps we would have not submitted the offer anyway. I'm not sure we want to be tied to the short sale process that long under there conditions. We want to buy a home, not sit on the sidelines for 2 months while we get taken for a ride of this realtor is playing some sort of a game.
The listing now states Contingent without kickout. The ad has been changed to read "1 lender short sale in progress. Make YOUR offer today" So that means he is still taking even more offers?
I just wanna know if there is an EMD check floating around, and who has it.
I find that part odd too. Usually if you collect the EMD, then you execute one contract and hold the buyer in play for 60 days or so with non-refundable EMD.
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