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Old 09-17-2009, 08:57 PM
 
5 posts, read 36,362 times
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I have submitted a back up offer on a short sale property in NC. There are a total of 3 bids on the property. First one submitted to the bank in June for 145,000, second very low. I am the third @ 147,000, submitted 2 weeks ago with the listing realtor. It was signed by the sellars and sent to the bank. I received a call this AM telling me the bank accepted my offer and we need to close in 30 days. Two hours later the realtor called and said NC law states the first offer has to be given the chance to match out higher bid and it will be their house. Does this make sense? What about our signed contract with the bank and the seller?
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Old 09-17-2009, 09:04 PM
 
Location: Raleigh, NC
30 posts, read 111,527 times
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With all short sales, the bank has to approve them. I had a buyer "under contract" on a short sale, meaning it was signed by the owner, however, the bank never approved it, and the property went into foreclosure. And we have had some get approved by the bank, just to have the approval revoked. You do need to find out if the first offer was signed by the owner as well. Who is representing you? If you do not have a buyer's agent, then I would talk with the attorney that is representing you in the close of the sale and they may be able to give you a little better direction.
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Old 09-17-2009, 09:15 PM
 
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My understanding is that the seller signed first offer submitted to our agent who is the listing agent. That went to the bank in early June. The bank did not move on it until 3 weeks ago. The bank assigned a negotiator to the realtor 3 weeks ago. We submitted our offer almost 3 weeks ago. The bank and the seller signed our offer. Now the agent is telling us since we are a back-up offer, under NC law, they must give the first offer a chance to match our offer. If they do, we cannot offer any higher. We are out of the game and it is their house. Does this sound right?
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Old 09-17-2009, 10:09 PM
 
Location: Austin
7,238 posts, read 20,018,099 times
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The terms you're using don't make sense. If you're a "back up", that means the seller and bank already have a fully executed contract. If they don't have a fully executed contract, you're not a "back up", you're just another offer.

Where you might be getting confused with terms is that when there are multiple offers on a short sale or foreclosure property, a notice is supposed to be sent to all parties who have submitted offers in order to get their highest and best price. No where should another buyer be told a number to match or beat. That makes no sense, and legally can't be interpretted correctly with what you're saying.
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Old 09-17-2009, 10:31 PM
 
Location: Salem, OR
15,010 posts, read 36,953,630 times
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Here is my .02 worth...

It sounds like the seller has engaged in three legally executed contracts, two in back up position. The agent presented all three offers to the bank. The bank chose yours because it was the best offer, but the problem is that you are a back up offer. The bank cannot randomly choose you, unless it states they can in the short sale addendum. Ours out here say the seller will continue to solicit offers and present them...

So...I am guessing the listing agent called the buyer agent to tell them the bank was taking another offer and the buyer agent got upset because the bank should counter the offer in first position first, giving that buyer the opportunity to engage in negotiations.

What the listing agent should be doing at this time is modifying the contract to include a multiple offer situation and allowing each party to submit their highest and best. If the buyer in first position doesn't allow that modification to the contract then it would be in the banks best interest (assuming you are just as strong a buyer) to not agree to the short for the first offer which would terminate that contract because that contingency failed.
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Old 09-18-2009, 07:29 AM
 
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This is exactly the case. The Agent for the first offer is complaining that their offer has been in since 06/09. They have implied that the listing agent, ours tipped us off to their offer and the bank took ours which was the highest. Now our agent is running scared due to a threat by the other to go to the Commission. The listing agent, ours, then told the 1st offers agent they if they wanted to up their offer to the 147,000 that the bank accepted from us, then they could have the house. She told us she had to give them a chance to match our bid per NC state law.
My first question is, what about the 2nd bid, what are their rights. Not that we want any more involved but why with 3 bids would they give only the first the chance to "match" ours. That seems unfair to the 2nd bid, whether it was low or not.
Something smells "fishy".
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Old 09-18-2009, 07:47 AM
 
5 posts, read 36,362 times
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One more thing to add. The first offer, was submitted to the bank in June and the bank never responded to weekly calls from the listing agent about it. We viewed the house in June and have noticed it still listed since then. When I called the listing agent on it 3 weeks ago, she said, we have finally been assigned a negotiator, so this the last chance to put a bid in before the negotiator looks at the bids. We thought, why not. We have remained interesed in the property since June but did not want to get tied up with a short sale. In the meantime, nothing else has popped up for us so we put a bid in for more than the asking price. It seemed like the timing was perfect for my inquiry to the realtor. WE verified that all 3 offers were sent to the bank at the same time. The bank looked at all three and did not want to engage in a bidding war. The bank negotiator thought our offer was fair and accepted it.
It seems as though none of the offers were really "back up". Just 3 seperate, different offers. Our offer being the highest.
What a BIG mess!!
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Old 09-18-2009, 07:49 AM
 
Location: Cary, NC
39,123 posts, read 67,802,820 times
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Harvey,
If you think something smells fishy, you should ask to speak with the Broker in Charge.
The BIC will be glad to clarify.
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Old 09-18-2009, 08:11 AM
 
5 posts, read 36,362 times
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Per the broker in charge, she had to give the first bidder a chance offer 147,000 which she disclosed to them. She said NC State law says this is the way it is handled. WE have not been able to put our finger on the NC state Real Estate laws re short sales and multiple bids.
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Old 10-06-2009, 02:09 PM
 
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In the state of NC this is correct.

A back up offer can not be considered until the offer in 1st position is considered. This is not the case in all states!!! In NC the bank has to at least counter (usually with the price of the highest back up offer) and give the person in first position a chance to accept that price. If the person in first position declines, then all back up offers can be considered and you would have gotten the house.

It sounds to me like you had an agent that did not understand this rule and was premature in telling you that you go the house when they should have been ensuring the banks followed NC law and gave the buyer in 1st position an opportunity to meet your offer and when the agent in 1st position challenged them they had to conceed they had messed up and had to go back to the bank and make it right(or yes they could loose their license as well as MANY other bad things).
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