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I don't know but somehow it seems wrong to offer on two houses, enter into contract and then dump one because you like the other better.
If buyers are going to do things like this, how can we (buyers) expect better from the professionals we deal with (listing/seller/buyer agents)?
Just doesn't seem right. Someone is getting stuck and going forward they will behave differently with the next buyer. Later on, we as buyers want to complain about sellers or seller agents. Can't say one thing and do another and then complain about it when it comes our turn.
I don't know but somehow it seems wrong to offer on two houses, enter into contract and then dump one because you like the other better.
If buyers are going to do things like this, how can we (buyers) expect better from the professionals we deal with (listing/seller/buyer agents)?
Just doesn't seem right. Someone is getting stuck and going forward they will behave differently with the next buyer. Later on, we as buyers want to complain about sellers or seller agents. Can't say one thing and do another and then complain about it when it comes our turn.
I think buyers are doing this nowdays because banks take too long to approve the process. I know about one house in very nice neighborhood in my area that already had 3 buyers and each of them walked away after wayting for 90 days! Last one waited even longer, 120 days... These buyers wasted their time and I bet they will make offers for multiple houses from now on... I think it's bank's fault for causing multiple offers of multiple houses situation...
Buyers never have to waste much time on a short sale.
Go to contract with the stipulation that they can withdraw at any time prior to notification of bank acceptance, with the right to not accept any counter from the bank.
Continue to shop while waiting.
If they get bank acceptance before they find something that is readily available, they buy the short sale.
If another better or acceptable property is readily available and they can lock it up before the bank approves the short sale contract, they go to contract on the 2nd and terminate the short sale. Buyer cannot control the seller's side of the transaction, cannot control the bank's pace of engagement, and should not be hostage to a timeline without any predictable schedule.
The short sale side has some control over the process.
The short seller can avoid some of the issues by engaging the right firm to negotiate with the lienholder(s). In North Carolina, that is a law firm. And by cooperating with the bank and any request for information.
The banks can avoid many terminations with deliberation and denial, counter, or approval at a decent pace.
around here, no smart listing agent would ratify a contract with an out at any time on a short sale.. the short sale addendum we use in my area specifies a date that the bank approval must arrive by. if it doesn't arrive by that date, you can give notice and then the seller has 3 days to produce an approval or the contract is void.
a smart agent will want a buyer to commit to atleast 90 days for the bank response.
"What the worst case scenario if both offer go thru?"
From reading the OP's post, I took that to mean two contracts at the same time and what the consequences might be if both were accepted. In other words, the short sale got accepted by the bank (since it was an approved short sale) and the other, also being accepted by the seller, so two accepted and approved offers to purchase.
To me, that is quite different than putting in an offer for a short sale and bailing while waiting for bank approval.
around here, no smart listing agent would ratify a contract with an out at any time on a short sale.. the short sale addendum we use in my area specifies a date that the bank approval must arrive by. if it doesn't arrive by that date, you can give notice and then the seller has 3 days to produce an approval or the contract is void.
a smart agent will want a buyer to commit to atleast 90 days for the bank response.
It embodies the points I posted.
I like that the buyer can bail, particularly in light of the fact that many short sales are popped onto the market by agents without a clue, with no preparation and no documentation submitted to any of the lienholders.
Further, we have local listing agents who mandate that buyers use short sale addenda drafted by their attorneys, which tend to be extremely onerous and burdensome to buyers, and I prefer to not get involved with those addenda.
If my buyer has to tolerate ineptitude and poor transaction management, or additional burden, and has to be locked in for any period of time, the price needs to reflect that hassle. Unfortunately, the lienholders don't care about the course of the transaction, only the numbers.
We are putting in offers on other homes even though we have a contract with a short sale. Some may not think it's right, but you really never know if you will be that one horror story of a person waiting for a home for months and months, into over a year.
This does happen often. Listing agents on short sales know it happens. Here they now are asking for a set amount of time to wait for the short sale approval (45 days is standard in the Short Sale Addendum) but are informally requesting to know immediately if the buyer finds another home. The lenders are getting better about substituting backup offers without starting the process over, so many listing agents have 1-2 backup offers ready to go at the beginning. This has been a big help to the seller.
Our policy is DON'T make offers on multiple properties. If your client really wants to do it, DISCLOSE. Write in the contract "Buyer is making offers on multiple properties but only intends to purchase one." This tactic can work in slow markets, but a seller in our market today probably wouldn't even consider it.
If you really need a short close, don't get in on a short sale or you will be pulling your hair out. It could be 3 weeks, 3 months or never.
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