Multiple Offers On A Scottsdale Short Sale
Time and time again, I am faced with the dreaded Multiple Offers situation on my Scottsdale short sale listings. Our policy is to submit only one offer to the lender at a time, and this tends to infuriate some Buyer's Agents. Let me explain why we have this policy in place.
Let's say we have a home listed for $300,000. We get an offer for $290,000, and submit it to the lender, along with comps, to support the offered price (assuming the comps support it). Sounds easy so far, doesn't it?
Along comes Buyer B two weeks later. He offers $300,000 for the same house. We tell Buyer B's agent that we will present the offer to the Seller (as we are required to do), but we will not allow our Seller to execute (sign) the contract, or execute a counter-offer, for that matter. In addition, we will not send this unexecuted contract to the lender unless the initial offer that the lender is considering "falls out". Buyer B's agent is furious, saying, "The law states that you must submit all offers to the Seller, so, by law, you must submit the offer to the lender".
Buyer B's agent is forgetting one thing. The Lender is not the homeowner, nor is the Lender the Seller. Until the lender has ownership of the property, the homeowner is the owner of the property. Basic contract law states that a homeowner cannot execute more than one contract on the same property. By allowing your client to sign two contracts, you are not only putting them at risk for a lawsuit, but you are putting your Real Estate License at risk as well.
In several cases, I've recently represented Buyers in trying to find them a home. In today's world, if you are not ready to "play ball" in the short sale world, you are wasting your time. In doing so, we have run across several instances where the Listing Agent on a Short Sale has said, "Just give it your best shot, and we'll send the offer to the lender, but please be aware that the lender is currently reviewing multiple offers that have already come in on the property". We don't walk away from these deals, we RUN!
For those of you that are listing these short sales and submitting multiple offers, PLEASE STOP! Not only are you putting you livelihood/career in danger (as well as your client), you are helping to create the problem of short sales now taking anywhere from 4-12 months to complete! Lenders (especially BofA) are currently overwhelmed with short sale packages, and are having a hard enough time keeping up. By submitting multiple offers, you are only impeding the process, not helping it.
For those of you that are Buyer's Agents submitting multiple offers on multiple homes, with the thought of dropping all but one in the end, again, PLEASE STOP! Lenders and other agents are catching on to this trick, and it's doing nothing but slowing down an already painfully slow process. In addition, you are "toying" with someone who is facing foreclosure. Many of these homeowners only get one shot at a short sale before the foreclosure date. In the business of Real Estate, your name and reputation is what ultimately makes you succesful. If you develop a reputation of submitting multiple offers and dropping all but one at the last minute, you will not last long in this business. Put yourself in their shoes before taking advantage of the situation they are in.
Agents, remember the old adage, "If you make a customer happy, they'll tell 10 people. If you make a customer unhappy, they'll tell 100"?
In today's internet world, if you make a customer unhappy, they'll probably tell 10,000.
Bob Hertzog Summit Home Consultants www.forsalephoenixhomes.com Copyright © By Bob Hertzog 2010 *Multiple Offers On A Scottsdale Short Sale*
Summit Home Consultants
Copyright © By Bob Hertzog 2010 *Multiple Offers On A Scottsdale Short Sale*
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