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The first showing:
We called the listing agent Sue to ask her to show us the house. She said she was not available, but her daughter would come instead. Turns out that her daughter Jennifer is "a buyer's agent", but we did not figure this out until she came and showed the house. Told us that the sellers had moved out of state and needed to sell the house, because they had defaulted on their payments and now it is a short sale (nothing on the listing said so). We asked explanations on the terms of a short sale and asked if that would make things more complicated.
The answer: Nowadays bank are all ready to deal with these situations. You negociate with the seller, and you get the bank approval. No problem, Sue is a specialist of distressed properties, she has the bank all contacted and it won't take any longer, 2 or 3 days after you sign with the seller, you will have the confirmation from the bank.
This was very important to us because at the same time, we were signing a contract on our current house.
The second showing:
As we signed a contract on our own house, we asked for a second showing. Jennifer is on vacations so Sue comes to show us the house. She repeats the same info as what Jennifer said. No problem, the bank is warned that a contract is coming.
At this point, I mentioned that I did not feel comfortable dealing with a mother/daughter team, as nobody was really representing our best interest. The answer from Sue was that Jennifer is a great agent, would never confuse issues, no worries.
The offer:
We decided to make an offer on the house, but Jennifer is still on vacations, so Sue offers to do the contract. As the listing agent, she says that she can't give us any advice. We go ahead and make the offer.
The negociation:
The sellers apparently are not fluent in English, it makes everything complicated, but through their son, we come to an aggreement. Their reluctance to sign the offer is because our offer does not cover what they still owe on the house and they have a second mortgage.
At this point, we ask if either situation are going to be a problem. No, says Sue through Jennifer, the bank has aggreed to the short sale, the sellers will be forgiven the difference, and the second mortgage is not our problem.
We have a contract!
We supply a copy of our contract for the sale of our house, our buyers pre-approval, our pre-approval, because we were told by Sue that with all the info from the start and with the bank being ready to deal with it, it will go really fast and easy.
We get a call that the sellers have signed and the contract is gone to the bank. Then we get a call that the signature page was missing therefore they are trying to get the missing page. And no, it has not gone to the bank. The next day, we get another call saying that they have the missing page and now the contract has gone to the bank.
Now the paperwork is being dealt with by a new gal called Amy. She calls and says that they are still waiting for the missing page, so of course nothing has gone to the bank, and don't worry, I will call you once a week for the update. WHAT??? We explain to her what we were told and she answers:
- It will takes a couple of weeks for the bank to even give the file to one of their people.
- It will take weeks for anything to be confirmed, because the sellers have a FHA loan on the house, it makes everything more complicated.
- Then it will need to be approved by whomever is holding the second mortgage on the house.
- The bank has not approved the short sale to start with, so we have to go through a lengthy process.
When the "2 or 3 days to get the bank approval" turned into the "2 weeks to get an agent to get the file" I called Jennifer and told her that visibly they had lied to us to get the sale done. She said that "WE had misunderstood" (I checked with my husband if he had heard the same thing that I did - he did), that she had said that it would take the bank 2 or 3 days to receive the file!!!
Then the lies have visibly accumulated and the fact that the house is NOT pre-approved by the bank for a short sale scares me. What other lies are out there?
Is the seller going to be short-changed because she told them they would be forgiven for the balance between our price and what they owe? What about their second mortgage? I can't help but thinking that with both of us speaking English they lead us by the nose to believe anything, what about those poor sellers in WI?
Also, she told us that "banks always accept the amount on the offer". Is that true? Or can they come back with a counter-offer?
I want to ditch our "buyer's agent" who did nothing for us, except show us the house. She also opened the house for the house inspector, arrived with missing keys, and managed to half ruin the garage door by running it over a padlock. She has not done anything that justifies that she should be paid a commission. Can we do this?
We have a friend who is a real-estate agent and we really wanted to use her as our buyer's agent, but the mother/daughter team made us believe that for such a project it was better to go with them because of their specific experience on short-sales and foreclosures.
With her mother buying the seller's agent, can this ruin our chances at buying the house?
And with so many lies, can we complain somewhere or get straight information somewhere? I can't trust either of them as they have been repeating the same lies.
If you still want the house, I don't think that you can just take the commission away from them and give it to your friend. I would pull out of this deal altogether and just go with a new agent.
As soon as you heard "short sale" and realized that you didn't understand what that meant you should have done some research on it. NEVER trust what a realtor has to say, not even if your realtor is your friend, because they are just worried about getting you sign on the dotted line so they can get that commission.
My wife and I bought a bank owned home (not a short sale because, from what I understand, you're never guaranteed the home in a short sale until you sign the final papers so anyone can jump in with a better offer and you end up losing any moneys you've put into getting your offer accepted by the bank) and they counter offered after we made our first offer so, YES THE BANK CAN MAKE A COUNTER OFFER.
Again, I would just pull out of this rotten deal and stop looking for short sales. Bank owned homes, yes, but never a short sale. Remember, this is a buyer's market and you have to stick to your guns as well as have a lot of patience before you finally choose a home.
Please do your own research from now on and stop depending on your realtor for any information that you don't have. They'll just tell you whatever they feel you need to hear to close the deal.
I'd agree to pull out of the deal. This sounds like a rotten scenario and you do not want a mother/daughter team representing both sides. I'm surprised this would even be legal. I don't think they can keep any earnest money since there isn't a deal, and even if they could, you could easily sue them for misinformation. You would likely win as the whole mother/daughter thing is very shady.
Best to cut your losses and walk away. Read up about short sales on the internet and you'll see that you need a long time horizon to make them work (up to 6 months at times) and even after a ton of time invested there is no guarantee that the deal will get done.
There are a lot of good homes available where you will just be dealing with the seller. And from now on make sure you have your own agent whose only interest is you and not the seller.
There are a lot of good homes available where you will just be dealing with the seller. And from now on make sure you have your own agent whose only interest is you and not the seller.
With several moves under my belt, I've dealt w/ several realtors, many of whom have been very nice, professional people. But one thing I will never mistake again is - they are NEVER on your side. They are third (or fourth) parties in a business transaction looking to make the maximum amount of money in the quickest amount of time. They are especially motivated in these difficult real estate times. My strategy grew to be this: forget the buyers agent. There is nothing they do that you can't do, and with a buyer's agent, the seller's agent is even more motivated to get a higher price since the commission will be split. If you deal w/ the seller's agent and build a competing alliance, they will be even MORE motivated to get that house sold, and will likely disclose things to you they shouldn't. You should definiately do your own homework, etc., but it is srategically to you advantage to ditch the buyer's agent and have only three parties in on the transaction. Actually, my hope is that realtors will become obsolete. With e-commerce online, and the ability to research comp sales in the area, post a website, etc., the only thing they do is grant access to the MLS. Why should they get 5-7% of my home for doing that? (Realtors, sorry if I offend, but I've dealt with many of you )
Post this in City Data's Real Estate Forum. There are experts on there who may be able to give you solid, professional insight on what to do in this situation.
An insignificant percentage of short sales actually close. The majority wind up in foreclosure. Anyone who suggests otherwise, is misinformed or got very lucky. The concept of a pre-approved short sale is unlikely. Most banks will not even talk, until there is an offer on the table.
Those that do close often take months, to do so. Short sales take patience, on the buyer's part.
There are endless variables.
Owners have to be nearly destitute for a bank to consider a short sale.
Owner may file for personal bankruptcy at any time and further complicate the transaction.
The so-called lender may be the servicing agent, not the owner of the underlying mortgage.
If more than one lender is involved, both will need to agree.
If PMI insurance is involved, the insurer must agree.
They may or may not counter your offer.
That the listing agent team created the perception that this was a slam dunk, especially given that there is more than one loan on the property is bad news.
Did your offer have an expiration date associated with the lender contingency? Are mother/daughter independent brokers/agents or affiliated with a broker? Are they members of a local realtor board? Did you make an earnest money deposit? Who is the escrow agent?
If you have not done so yet, please seek legal counsel to review your contract and give you options.
If you still want the house, I don't think that you can just take the commission away from them and give it to your friend. I would pull out of this deal altogether and just go with a new agent.
As soon as you heard "short sale" and realized that you didn't understand what that meant you should have done some research on it. NEVER trust what a realtor has to say, not even if your realtor is your friend, because they are just worried about getting you sign on the dotted line so they can get that commission.
My wife and I bought a bank owned home (not a short sale because, from what I understand, you're never guaranteed the home in a short sale until you sign the final papers so anyone can jump in with a better offer and you end up losing any moneys you've put into getting your offer accepted by the bank) and they counter offered after we made our first offer so, YES THE BANK CAN MAKE A COUNTER OFFER.
Again, I would just pull out of this rotten deal and stop looking for short sales. Bank owned homes, yes, but never a short sale. Remember, this is a buyer's market and you have to stick to your guns as well as have a lot of patience before you finally choose a home.
Please do your own research from now on and stop depending on your realtor for any information that you don't have. They'll just tell you whatever they feel you need to hear to close the deal.
Thank you for your answer. We did not choose a short sale, it was mentioned nowhere that it was, the real estate agent told us so during the first visit. We researched, found quite a bit of negative information about short sales and that's why asked a lot of questions from the realtor. Honestly one should be able to trust the professionals involved in such a situation. Thanks for the information about the possible counter offer, that's very important
With several moves under my belt, I've dealt w/ several realtors, many of whom have been very nice, professional people. But one thing I will never mistake again is - they are NEVER on your side. They are third (or fourth) parties in a business transaction looking to make the maximum amount of money in the quickest amount of time. They are especially motivated in these difficult real estate times. My strategy grew to be this: forget the buyers agent. There is nothing they do that you can't do, and with a buyer's agent, the seller's agent is even more motivated to get a higher price since the commission will be split. If you deal w/ the seller's agent and build a competing alliance, they will be even MORE motivated to get that house sold, and will likely disclose things to you they shouldn't. You should definiately do your own homework, etc., but it is srategically to you advantage to ditch the buyer's agent and have only three parties in on the transaction. Actually, my hope is that realtors will become obsolete. With e-commerce online, and the ability to research comp sales in the area, post a website, etc., the only thing they do is grant access to the MLS. Why should they get 5-7% of my home for doing that? (Realtors, sorry if I offend, but I've dealt with many of you )
Ok, my rant is done
I'll respectively disagree with you on this one. I've purchased two homes using buyers agents both times and was extremely happy, both times. I don't doubt that there are questionable buyers agents out there but there are certainly many good ones.
Of course you need to know what you are dealing with and do your own homework, don't rely exclusively on their recommendations for choosing a property and price, but for locating properties, comparing a few and ultimately deciding a final price point, wouldn't you like a knowledgeable person to speak with?
You may have found a pushy agent who was more interested in closing the deal rather than answering your questions. From my experience, the best buyers agents are very knowledgeable but keep most of their opinions to themselves until you ask for them. A buyers agent can assess what you like and dislike in a property and quickly find other similar properties. There are hundreds of places on the market and the buyers agent has seen many more than you so they can let you know which ones you might be interested in.
Just my $.02. I'm not an agent but simply have been happy with my experiences and would never recommend a home buyer go it alone.
An insignificant percentage of short sales actually close. The majority wind up in foreclosure. Anyone who suggests otherwise, is misinformed or got very lucky. The concept of a pre-approved short sale is unlikely. Most banks will not even talk, until there is an offer on the table.
Those that do close often take months, to do so. Short sales take patience, on the buyer's part.
There are endless variables.
Owners have to be nearly destitute for a bank to consider a short sale.
Owner may file for personal bankruptcy at any time and further complicate the transaction.
The so-called lender may be the servicing agent, not the owner of the underlying mortgage.
If more than one lender is involved, both will need to agree.
If PMI insurance is involved, the insurer must agree.
They may or may not counter your offer.
That the listing agent team created the perception that this was a slam dunk, especially given that there is more than one loan on the property is bad news.
Did your offer have an expiration date associated with the lender contingency? Are mother/daughter independent brokers/agents or affiliated with a broker? Are they members of a local realtor board? Did you make an earnest money deposit? Who is the escrow agent?
If you have not done so yet, please seek legal counsel to review your contract and give you options.
Dear Mom,
Thank you. This is very clear information. What you are saying goes completely opposite what they said. They had talked to the bank, the bank had agreed to the short sale, the second mortgage was not problem, it would go really fast and easy, etc.
They are under a Remax banner. I have a feeling that they are somewhat independant, but I am in the process of checking this. We gave earnest money, I think it's in Remax's name.
Yours truly,
Miss Frog
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