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I'll try to make this brief... but here is the deal.
My husband and I fell in love with a house the weekend before memorial day. Our agent called sunday to get the disclosure, covenants, etc and informed the selling agent that we had an offer. We were willing to go anywhere to drop it off to get it in as quickly as possible. The selling agent asked us to drop it off at his office on Memorial Day morning. After dropping it off we were informed by the listing agent that the house was a "possible" short sale. Wednesday morning rolls around and our agent informs us that there is another offer on the house from an agent in the same firm as the selling agent. I found that very bad business because our offer had been in for 48 hours with no reply. We upped our offer and emailed it in.
Friday afternoon we are informed there is a possible third offer. I freak out because this is honestly our "dream house" but know we can not go further. We keep our offer the same. Friday the selling agent called and said our offer was verbally accepted, but he didnt have the papers with him when he met with the seller.... ok.
Well sat we go to initial the papers with our new offer, and we have some issues with where the papers are... etc etc.
OK heres the meat of it. Our offer was faxed and emailed to the seller's lender Monday. Apparently the seller had a previous offer that was sent to the lender, but was denied, but during that time the MLS listing was changed from ACTIVE to PENDING. Now we are at that same point and the MLS listing for the house still says ACTIVE. Should it not be pending? Does this mean that other offers can still be sent to the lender on top of ours?
I know the short sale process is like pulling teeth.... but my main concern is the selling agent doesnt seem to be on top of things... and he and the seller are buddies. Is he allowed to keep it active? Can this house still be jerked our from under us without us even knowing? I know he has a negotiator already assigned from the previous offer, but why did the house get a pending status then but not for us?
Thanks for all your input and help. I have tried speaking to my realtor but she just seems to dance around the question...
I'm not a realtor, but if you have a signed contract already then it's yours to lose and can't be "jerked from under you." Keeping the house listed as Active doesn't mean much. Even if it's Contingent or Pending, the seller can still receive offers but cannot accept them unless the contract he signed falls through (either because you can't secure a loan, the home inspection fails, etc.).
But I'd still say to ask someone who is in the business (your agent or some of the other realtors on this site).
1. Your agent is the "selling agent." Buyer's agent = Selling Agent.
2. You have an agent and should get answers from your agent or your agent's Broker-in-Charge if you are not satisfied with your agent's communication.
3. "Pending" status should only be entered in the TMLS when all contingencies are removed. Bank approval of a short sale offer is a contingency. Negotiation of short sale with multiple lenders, i.e., first and second mortgage can be a major hurdle to clearing the short sale contingency. Inspection and repairs, appraisal, loan commitment, cost of repair contingency, are other contingencies.
I'm not a realtor, but if you have a signed contract already then it's yours to lose and can't be "jerked from under you."
Ahh, but in a "short sale" situation, it seems like it can be, for the reason Mike describes above. If you put in an offer that is, say, $20K less than the mortgage owed on the property, and sign a contract with the seller based on that offer, the bank(s) still have to approve it. But if another buyer comes along and offers $10K less than the mortgage before the bank(s) have approved the first offer/contract, which one do you think they're going to approve? So it seems to me that until you have bank approval, you will always be subject to losing the deal to a higher offer.
Good Luck with the short sale! They are a major pain and VERY frustrating. The process took four months. Here is my experience I wrote about in another thread.
We just moved into my boyfriends house 3 weeks ago which was a short sale. His offer was immediately accepted ($5,000 under the asking price) around January 17th and was suppose to close February 17th. The bank wasn't ready and said they needed a couple more weeks. Well that came and went and they said they needed until the end of March. We waited and waited. He finally closed on the house a month ago. After the closing we found out the bank was trying to get the homeowner to renegotiate his mortgage just weeks before my boyfriend closed on his house (after waiting for it for a couple months). The process was VERY frustrating, especially with him being a first time home buyer. In the end he saved $28,000 and it was very worth it. It was really nerve racking just wondering if he was even going to get the house and this was all for nothing. Just be prepared for a lengthy process. Hopefully it will go smoother for you guys. It's in the banks hands...
And by the way, it was never pending and was always active.
Ahh, but in a "short sale" situation, it seems like it can be, for the reason Mike describes above. If you put in an offer that is, say, $20K less than the mortgage owed on the property, and sign a contract with the seller based on that offer, the bank(s) still have to approve it. But if another buyer comes along and offers $10K less than the mortgage before the bank(s) have approved the first offer/contract, which one do you think they're going to approve? So it seems to me that until you have bank approval, you will always be subject to losing the deal to a higher offer.
If the Seller, who is actually the principal, signs two offers, goes under contract two times concurrently, the first buyer would probably have a very strong case in court if the contract was breached.
The bank approval is a contingency to a contract between two other parties, a buyer and a seller.
In my experience I always put a pretty short leash on the bank. There is absolutely no reason to give the bank an unlimited time to make a decision. If you leave the timeframe unlimited the bank will shop the deal around as best it can. With a short time frame, and a take it or leave it attitude the bank must make a decision. Whoever the OREO manager is, they are charged with maximizing the recovery. If they think you are willing to walk they will make their decision one way or the other. No sense letting yourself be used!
codyhopkins has it spot on. the bank will want to maximise their $ so will take your offer then delay as long as possible to try and negotiate something better, knowing they don't need to close. I would give them a time contingent offer, i.e. offer falls through if house not closed by deadline.
If the Seller, who is actually the principal, signs two offers, goes under contract two times concurrently, the first buyer would probably have a very strong case in court if the contract was breached.
The bank approval is a contingency to a contract between two other parties, a buyer and a seller.
I understand Mike. My very limited experience - not nearly as extensive as yours - is that various types of contingencies can be conveniently manipulated without too much difficulty while still staying within the literal terms of the contract. (Not necessarily in good faith.)
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