I can not believe we are even having to think about writing a post in today's market for Florida agents and the Wellington Florida real estate agents to explain that a short sale is NOT a bank owned property!! But we are!
Nestor asked me to write this because this really just happened and we hope to educate agents as to what happens when you make an offer on one of our short sale listings.
After we receive your buyers' offer we contact our seller who is the homeowner of the property and present the offer to him/her/them.
It is then up to the seller what he wants to do with the offer. He can reject the offer, he can accept the offer, he can counter the offer or he can choose to do nothing with the offer. Your offer expires if he does not sign the offer before the time for acceptance lapses.
On one of our listings we received 3 offers in one day. Most all of our short sale listings get multiple offers. When this happens; our sellers choose one offer that they feel is the best and often ask for our input based on our experience. Then the seller will choose a back up offer also.
If none of the offers meet with the sellers' approval and with our experience of what a short sale lender is going to approve then the seller may send back to the buyers a counter offer. He may choose just one offer to counter or all.
So there is one agent who had sent in one of the offers for her buyers. The offer was $20,000 below asking price, the financing clause stated that the buyer was approved for his loan, yet there was NO approval letter. There was a pre approval letter that said his financials, income, etc were NOT reviewed. All they did was pull his credit. The financing spaces were not filled in correctly. When I did the math, the offer showed that the buyer was getting 100% financing. Then the addendum stated that the buyer was also asking for 6% back from the seller.
Ok, so here's the deal: The other two offers are over list price and ALL CASH offers. It does not take a rocket scientist to figure out which one the seller is going to want to go with!
Let's see: let's weigh ALL CASH versus 100% financing!!!!
I told the agent that we sent the seller all the offers. He was out of the country and would not work the offers until he returned. We alerted all the agents about this.
Then Nestor gets THE CALL!
The agent with this 100% financing clause in the offer starts yelling at Nestor- "You are supposed to send our offer to the bank!"
"What do you mean?, This is a short sale."
To which the agent continues to yell, "I looked up the tax rolls and it says that the mortgage is held by XYZ bank. You have to send our offer to the bank. The seller does not have any say in our offer."
Nestor tries to explain again that this is a short sale. The mortgage information on the tax rolls is to show who the mortgage company is. He tries to explain to her that the tax rolls clearly state that the seller is the homeowner and NOT the bank!
Then she tells him she has been doing short sales for a year now and she never sends the offers to the sellers. She just sends them right into the bank. WHAT!?
Then Nestor tells her that her buyer's financing does not look as strong as the cash offers but that is for the seller to decide. She then tells Nestor-
"Oh no, they are putting 3% down! They don't need the 6% back. They do have an approval letter." and on and on.
Well, if that was the case, ( and I just came back from an all day Contracts Class with an Attorney) then her buyer's offer needed to be written that way and not the way that it was.
So sometimes the buyers want to see how low they can go, how much they can negotiate and many times in our town, that will lose them the deal. Over 60% of our closings are with ALL CASH transactions.
Another example of misinformation on how a short sale transaction works and even who the principles are.
Foreclosure Is NOT An Option! Call Nestor and Katerina Gasset today at 561-753-0135 for a confidential interview regarding your options. To view Welington Florida Homes For Sale Click here. We know Wellington Florida Real Estate and Wellington Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida: Call us today. Copyright © 2010 By Katerina Gasset, All Rights Reserved.*Short Sales 101- Short Sales Are NOT Bank Owned Properties*
Don't Delay! Don't Wait Until The Sheriff Is Knocking On Your Door! Pick up your phone and call us to see if you can avoid foreclosure.
Nestor Gasset and Katerina Gasset- Realtors®, CIPS, ABR, SFR, GRI, REOS
N & K, there's an agent in our market who lists all his short sales as REO's in the MLS. There are just not the same.
Interestingly practically all our Short sales are cash deals as well. And I have that fun when after 2 days you call the agent to find out why the offer was not accepted and they tell you that everything is fine and they have sent it to the Lender. yesh, but did ht e Seller sign it?
And they would tell me that they always send directly to the Lender and are surprised that I insist to have the offer signed by the Seller to consider it accepted.
It is weird
Jon- WOW! How widespread is this misinformation? The seller still owns the house! I guess it may be rocket science after all:)
Matt- Where do these people come from? LOL!
Do you find yelling is used to cover some lack of knowledge or other deficiency? I hardly ever hear of smart agents yelling at a fellow agent. Just having seen Nestor's picture, I don't think I'd want to yell at him, especially if we were in the same county. He looks like a man who can handle himself were he to get riled up.
Hello again :)
I can't believe that there are still agents thinking that, but ohhh well ! :) do you think that's because we know more about the topic and still is normal for others to think in the wrong way? who knows ! great blog !
That agent sounds like a dope. He or she needs to get educated and stop acting so hungry for a commission (that they didn't earn). It always seems like the worst headaches come from agents who don't know how to do their job.
Wayne- You are too funny! Yes, Nestor can certainly take care of himself:) but he is a gentleman when it comes to ladies. She was yelling, he told her if she could not stop, that he was going to hang up and she can call back when she can speak without yelling:)
Ray- Who Knows! Ignorance and lack of taking an initiative to learn is what I think it is.
J Phillips- It is worse than that but I don't want to defame anyone, others might know who the agent is if I give any more clues. :)Not a member of AR BTW.
How can you look your clients in the eye people...and tell them you are going to do everything you can to get them this home....when you don't know how the industry works, you don't know how to write a contract and you don't know how to communicate with their lender???????????
It seems that everyday these days there is one more reason to require for all Realtors to get back to a classroom and get educated if they wan to keep their licenses.
You can expect 60 hours is enough. . that is why Realtors have such a low reputation and no respect by the public.
Send them an e-mail with a link to this post and comments. . . . . . if they have an e-mail address.
I bet they don't return phone calls either -- some of the REO agents (or THINK they're REO agents and are really SS agents) are just hard to work with.
WOW! That boggles my mind! I've never had any formal education on short sales. I have so many buyers in short sales right now that even I KNOW the steps that are taken when putting an offer in on a short sale home. I also have a short sale listing. It's called self-educating. I bet she felt stu-pid.
It's the people who lack information that yell the loudest, make threats and try to put the burden on others. As listing agents, we work for our sellers, and our task is to get them the highest price and best terms. I don't mind helping out another agent in putting the deal together, but will walk away from an aggressive moron.
Katerina:
This is an important distinction. I think many people just lump short sales into the category of "distressed properties" and treat them like foreclosures when they are, as you point out, not bank-owned. You are still dealing with the seller at this point and not a bank. If she is as experienced as she claims, she should know this...
I WILL BE SO HAPPY WHEN SHORT SALES AND FORECLOSURES ARE NO LONGER SUCH A HUGE PART OF OUR BUSINESS! Terrific post :)
Short sales are much different the Bank Owned. Looks like someone needs some additional education. and aslo some manners!
I think we will continue to see short sales and foreclosures in our business for quite some time and we, as Realtors owe it to ourselves and to our clients to get educated on these transactions. Thank you for the information. I will be sure to pass it along.
Katerina - I still can't believe you had to write this post and educate agents, although for the most part many agents that are at least educated in the short sale process should know that it is a transaction between the seller and the buyer. Besides, doesn't MLS clearly states that it is a short sale and not a REO?
Perhaps an invitation to AR is in order to help fellow agents to get a clearer understanding.
Gosh, when a Realtor doesn't even understand the intricacies of his/her business, how on earth could his clients ever have a chance? Unfortunately, there are quite a few agents that lack the knowledge in their chosen field. And they stick out like sore thumbs!
Wow, another reason why it's so important for agents to continually go to classes and continue to learn...
I am always so surprised reading your Short sale blogs that all these realtors down there are not familar with the difference between short sale and foreclosure, especially in your market place that is such common transaction...!
I AM NOT A SHORT SALE EXPERT, and even I know that! Great post & very helpful information for the "less informed".
I had a similar experience. I asked the agent, "When i present both these offers to the seller, yours and a higher offer for all cash, which do you think I'll encourage him to accept?" I've also gotten agents tell me that I'm breaking the law by NOT presenting ALL offers to the BANK! Heck, I've never had an REO listing or listed any of my shortsales as an REO.
I handle it the way you do. But we rarely have cash offers up here.
We have the seller sign, send it to the bank, take back-ups.
Cash is King and the less the buyer wants back the better.
One large company up here, does not have sellers sign, sends them all to the bank. Wonder where they are getting their information?
I've been seeing a lot of properties listed with the phrase bank and/or corporate owned. Most of the time it was a corporate investor, but the agent wants to sound like it's a bank owned property.
What a great post!
Katerina, I cannot believe either that a practicing Realtor in TODAY'S MARKETPLACE doesn't know the difference between short sale and foreclosure, and isn't willing to listen to the listing agent, especially to someone as EXPERIENCED as you and Nestor.
Some of my Buyer's who have made offers on Short Sale properties have been confused by this, but never an agent. Scary!
Thanks for another informative post! I'm surprised all Realtors don't already know this. Hopefully someone will learn from your post but I bet all of us on Active Rain already know this :)
and to top it all off, it sure sounds like a clear violation of the Code of Ethics: Article 11 - this agent is obviously not competent in short sales.
I had one like that...I told the agent the seller wouldn't accept that type of deal from the last agents proposed offer which came in two days earlier and the counter was turned down by the buyer and the agent. This offer wasn't as appealing either but the agent refused to listen. So we submitted it only to have them waste their time writing the offer. They kept arguing that the bank would accept their offer even though we had written approval for a price. This was back about year ago so things were a bit different then. Eventually they countered although the seller wasn't confident it would close....it was all they had at that time. The agent ended up sitting around and never followed through on their end...found out later that the buyer wasn't able to qualify and the contract wasn't contingent on any specific gov grants. They claimed they couldn't qualify without the grant...unfortunately that wasn't in their contract and wasn't disclosed. The moral of the story was the agent didn't understand that it was a short sale and not a foreclosure or REO. The other fun kept telling them if they want ny thing about this agent was I kept giving them a hint....present everything at once...deposits...approval letters...all addendums including the short sale addendum....they never did and in the end they were gone and we sold it to someone else fully qualified.
I can't believe there are still people who do not understand this.
We have dealt with agents who give us "verbal counter offers" and get mad when we don't submit to the bank. Really? Do you verbally counter offer with regular real estate transactions? Get me something in writing and I will sumbit it.
We have another agent who likes to alter all of the contracts. Now, I'm not an attorney, but even I know that you cannot alter a legally binding agreement without a law degree. Sure, alter the date, and other blank spots, but actually changing the verbiage and adding language to the contract cannot be done by the buyers and it cannot be done by the agent. If they want that verbiage in there so bad, have their lawyer do it and send it to the seller's lawyer and get it done that way.
Unfortunately, we see so many agents toot their horn about being a short sale expert. One such agent has been riding out backs and "none of her short sales ever took this long!" When we pulled her realtor info, we found out that last year was the first year she worked short sales and only closed on 2 short sale deals...and she was the buyer's agent on both. Nice.
There should really be an in-depth training class for realtors. They won't get accrediation for it, but they will be more knowledgeable about the busniess. And it should be mandatory. Ai-yi-yi.
Angela- Here in Florida a Real Estate licensee may fill in the blanks and add addendums. We have to be careful as to not being accused of practicing law however that is up to each agent how far they want to push the envelope. But we have our attorney draw up addendums all the time. We then add those to our short sale contracts. We do not use our FAR BAR short sale addendum because it is not beneficial for our sellers. But a buyer or a seller can add whatever they want to the offer, they can write whatever they want. Of course, I don't want to be a party to that but it is certainly not illegal for the principles in a transaction in the state of Florida to write up their own language or contracts for that matter.
I have not met many agents who know how to do short sales even after their certifications. Katerina
I run into the same thing...It's rare but it happens. Very surprising since most of the sales within the last 3 years in our market are short sales.
Thank you for this post. I hope the people that need to read it, read it. I too have had listing agents send offers to the lender without having their seller sign it and tell me that they need to get the most money they can for the lender. They just can't seem to get it through their head that the seller is their client.
Keep up the good work.
I love when agents point out how long they've been in the business and how many of x and y they have done. It cracks me up because they are still wrong. The seller of a short sale is the owner of the house and not the bank. And the seller can decide what offer they accept, or not accept.
Katerina and Nestor - it's too sad that not every agent who tries to do a short sale is really knowledgeable about the procedure and essence of it. I was in a situation when I submitted to the lender a signed by the owners purchase agreement along with the whole package supporting the deal, and lender told me that they don't care about a signed agreement as they take other criteria in consideration when they make a decision about approval or disapproval of a short sale.
Many agents are confused with ownership and decision making rights in short sales.
We don't do a lot of short sales in our area but I did just sell an upper income home that was a short sale. Although the seller negotiated the offer, ultimately the bank had to approve it. I don't know if that's normal, but that may be where the confusion lies.
I always try to give others the benefit of the doubt, but this agent simply has it wrong. Her broker and/or board need to be notified about this so there is no further harm to the public.
There are a lot of uneducated agents out there on both bank owned and short sales. Thanks for the educational post.
I agree with John, her broker should be notified so she can go through some training before she gets them in a boat load of trouble!
There are a lot of uneducated agents out there on both bank owned and short sales. Thanks for the educational post.
Don't you hate it when people argue about something they know nothing about?
You are kidding right? How the heck could a Realtor not know what a short sale is in this market? That's crazy!
When I read your title, I thought to myself, "Seriously now..." And then I read the post and have a completely different "Seriously now..." in mind. Wow. Thanks.
Katerina,
Not only have I had this happen as the listing agent, I've done the reverse when I represent the buyer and the seller's agent "forgets" who actually owns the home and has the right to sell it! Very scary...
I have to confess. I've made a kinda mistake on this before. Partly because in the MLS (in our locale) is showing the property as "ACTIVE" -- and it's not pending. We wanted to present an (highest and best) offer with an escalation clause. It's confusing because, again our MLS shows the property as ACTIVE. But, in your scenario, clearly there was better offers to accept.
It is hard to understand how some people get a real estate license. It is people like this that give us all a bad name.
It is widespread, I even get calls on a weekly basis on our short sales, asking if they would accept a lease option or a lease purchase. Hello! Not a good idea there!
Katerina ---- very interesting situation there -- you are correct in that there is so much misinformation out there -- how can we ever get all the real estate agents educated?
Just goes to show how much more education is needed for agents. I'm not really surprised as I run into this kind of stuff quite often. I don't know who's teaching them (and if they're taking courses) but they sure have wrong information as to how shorts sales really work. 100% financing - sure, you bet. Buyers thinking they'll get this passed in a short sale are dreaming...agents that suggest it need to get back to education.
Margaret Comment # 43- This is Florida, ground zero for foreclosures and short sales.
You are correct that the seller's lender has to approve the short net he is going to get but that is only a contingency.
It is no different than a buyer having a financing contingency. A buyer who is getting a loan for the property can not close unless his lender approves him and the property.
A short sale is a bi lateral contract between a buyer and a seller. The seller's lender is not a party to the contact just as the buyer's lender is not a party to the contract. Neither lender signs the contract.
So I don't get the confusion. Short sales have been around since the invention of the mortgage. I find it odd that no one learned about them in real estate school. I did way back in 1983 and again in each state where I moved and got licensed.
Katerina
I feel your pain! Sad that this is a "Realtor". The worst thing is that the "CONSUMER" doesn't understand the difference between S/S and REO. I have buyers that want to low ball short sales and think the "bank has to take it". It's NOT the banks decision....yet. It has to be the OWNER first. We haven't had many cash buyers on S/S here. The stress is when a S/S is approved they want it closed ASAP and some lenders (for the buyers) are needing 45 days. We have to educate the consumers too. I didn't think we had to educate other agents.
Katerina.. informative post for those who are grossly misinformed. Hopefully they will begin to learn how this business has evolved.
Katerina:
Send these agents some links to training material on the internet. I don't think there is any excuse for one agent to yell at another. How very unprofessional.
I get that just about everyday. I feel real bad for the buyers that are working with agents that are just so.....ignorant about real estate.
Katerina,
UNREAL. And these agents are representing potential buyers! I find that I am continually educating buyers agents about the short sale process, which frankly is frustrating, especially during these times when short sales is such a huge part of today's market. Frequently I have had to explain the differences between a REO and Short Sale to the agent. Yelling at the LA and making disparaging remarks does not help the process move along any faster either. I can not stand it when an agent starts to yell at you thinking that will make a difference in the outcome. Not professional. Nestor handled this agent perfectly.
I had a buyer walk on my short sale listing, after the approval came back from the bank. The agent did not understand short sales, also did not understand why her buyer lost their EMD because they did not withdraw their offer within the contractual time frame.
Nestor is a cool cookie - I would probably have yelled back. :(
Great post! I like the fact that Nesto did not respond to this irrate agent in the same manner. Way to go Nesto!
That is amazing. The seller does not have to accept any offer and can wait past the time in the contract if he wants and make it void.
Tell the agent he needs a refresher course.
Any agent who does not know the difference between a ss and REO should not be selling R.E.
Carol- Comment #61- We are very careful where we send agents in our area because there is so much bad info on the net too. We have taken all of our short sale posts and put them on a URL on our website: short-sales-florida.com. We send every local agent there to try to help train them. We tell them to send their buyers there. We won't steal their buyers. We are listing agents. Our buyers agents are plenty busy. Every potential seller that finds that site through google, lists with us. It is highly educational.
But this lady said she does short sales. THat was the most upsetting part of the conversation! I wonder how many homeowners she listed to lose their short sale opportunities because she does not know what a short sale is. Scary!
Wow! That is pretty frightening to know she is representing clients out there!
Katerina,
It still amazes me how some folks ever get a license to practice real estate.
I think it is amazing that some people even have a license. Every market has thier village idiot....congrats on finding yours.
I have had a similar experience. Some do feel that the bank has the time and wants to review and counter every single offer that comes their way.
I have had a similar experience. Some do feel that the bank has the time and wants to review and counter every single offer that comes their way.
Katerina,
Hopefully this real estate agent and everyone else unclear what a short sale is have a chance to read this post. Sometimes you wonder where have they been.
This is incredibly stupid. The banks that I've worked with won't accept a contract, that's CONTRACT unless it's been executed by the seller. Makes no sense to me. Maybe they are looking for lender approval first? Weird.
Katerina, you've touched on all too common statistics of Agents representing Sellers and/or Buyers. It's true that so many of the "yellers" are the least knowledgeable. It seems that not a week can go by that I run across such an Agent and I really can't believe that they are representing customers; it truly is criminal.
Katerina - I just had one of these about 10 days ago, I will say, I got a little riled up over the phone though. He says "I've been in the business over 20 years and....," I said, "Have you ever been involved in a short sale?" He says: "Are you questioning my intelligence, I've been in real estate for over 20 years and..." I said, "No, I'm not questioning your intelligence, just wondering if your familiar with how a short sale works"
My seller went with a different offer, it was a relief! Thanks for sharing your story.
I like Lenn's idea though I find it hard to believe that an agent wouldn't know the difference between REO and short sale by this time in Florida.
In response to the agent expecting the offer to be presented to the bank, I think Nestor should have advised that agent that she may want to discuss contracts and short sales with her broker before calling. Secondly, if her clients wish to withdraw their offer and submit a substitute offer, we'll be glad to make the substitution as you were already told the seller isn't making a decision yet, so there is still time.
I was representing a buyer and asked the listing agent if he had completed any short sales recently, "It's kind of hard to avoid them in this market." was his non-answer. I had already looked up his performance in our MLS before I even asked him the question. He had represented 3 buyers in the past 2 years and sold 1 listing - none of which were short sales.
What a great message... There are Realtors in our area who need to learn this as well. I couldn't have said this any better myself !
Drick- URGH! Part of that is the sellers' responsibility also. They need to choose agents who can show success in closing short sales. Nestor closed his first short sale in 1995. In 1998 there was one building here that was built during the 80's recession and all the listings were short sales in there- 1998! This is where I don't get it.
A short sale has been around since the invention of the mortgage. I know alot about trust deed states and no judicial states because I was licensed first in CA. But heck, even in real estate school and on the exam here in Florida you still had to know the difference between a trust deed state and a deed state like FL. If there is not enough to pay off the mortgage, how in the world does that equate to the lender owning the property?
We get referrals from agents here who refuse to get into short sales. It has actually been developing into a little niche for us. They can look up our MLS stats and they can read about us in the National Realtor Magazine as success agents. We toot our own horn because in the short sale business you are doing everyone a favor for shouting from the roof tops that you can do short sales. We have a 98% closing rate. So now even attorneys refer their clients to us.
This lady is not all there, I don't think. Can't go much more into detail, I wish I could. Maybe I will write something down the road and then you can read between the lines. Katerina
As short sales rise, I wouldn't be suprised if a short sale class become mandatory similar to our ethics classes.
I cannot believe that there are agents out there that do not understand that sending multiple offers in on a short can clog up the system, leave the property on the market longer than necessary and could end up with a foreclosure happening instead of an approval!
I agree with you Kat...they've been around forever. The problem is they weren't very common back then. I actually did my first one back in 2003. I had no idea what to do...my broker suggested it and I was like ok...now what? I thought she was talking about the stock market. It turns out that it was only about 17K up side down. We managed to get them to only hold the seller responsible to come to closing with $450 dollars and that was only because they didn't pay a water lien that was attached to the property when they purchased it from HUD....some how they didn't know about it and it just was left there. And actually I was worried that it would take about 60 days to close...now I wish all my shor sales closed that quick. The problem with agents these days is they all think they are so called experts and when not all of them are. It's nice to take a course so you can learn some of the ups and downs of the process but getting in the trenches and seeing the different ones out there is where you'll get the most experience even if it's from trial and error. I bet if you asked some of the agents back then what they were...they wouldn't even know.
I began reading and said," Seriously now...." Then after reading your wonderful blog and then said,"it is soooo true." Great points and thank you for writing this awesome post.
Neal- I guess I need to be more understanding of people who have poor retention of information:) I remember the assumptions of mortgages and wrap arounds as clear as day:) Katerina
Katerina ... as always tons of great information! You definitely an expert on this subject!
thank you, pippa
Katerina ... as always tons of great information! You definitely an expert on this subject!
thank you, pippa
Thank you everyone for commenting and adding to the conversation. I am busy getting ready for Bob Stewart's Hyper Local blogging challenge. I am still getting my webinar slides ready for a blogging webinar I am teaching on Thursday. So much to do! Not to mention we just had to take away several of our short sale files from a new processor we decided to try, oh boy! They just think it is processing. Short sales are so much more than just making phone calls to the lenders. You have to be proactive. Nestor just pulled the files today and that doubles our work load here in the office. We can trust our daughter but we have been hard pressed to find anyone else we can trust with getting the results we are used to getting. Katerina
Incredible!
I'm shaking my head as I'm reading this but glad you put it out there just the same. I was listening to a seminar which I posted with BofA, Wells etc. on how they are going to speed up the process with shorts. At the end of the program where audience questions were asked, there's that agent that says 'what do we do with multiple offers we've accepted?' A lot of silence, then someone steps up to say - 'Please only send one that the seller accepted' in what I thought was a very sympathetic voice. Jeeeez.
Wow, what an "interesting" buyer's agent. Wow, now I didn't think people thought short sales were deeded to the bank. I thought submitting offers with proof-of-funds/full pre-approval letters was the norm these days? I guess I should take that back, all of my short sales clearly state what's required with the submission of the offer; however, I guess I did receive an offer just last week that was a "blind" offer with no documentation to support their ability to purchase the property. Not only that, I sent them a copy of the seller's disclosure and told them to make sure they read it in full (in which there is information regarding an issue with the foundation) and they turn around and ask me if there's any issues with the foundation. UM HELLO, If you paid attention to the information that was supplied to you AND actually looked (or had a representative look for you) at the property, you would clearly see there are issues....A waste of everyone's time in my opinion.
I get my seller to sign all the offers, even the rejected ones. This documents that I have shown the offer and am not doing a pocket listing.
I am surprised the lender would accept an offer that had not been signed by the seller. ....but I also know there is a lot of confusion out there in the general public about the whole process. Like all of you, I thought our agents would at least understand ownership.
Isn't amazing that people like that manage to stay in the business. A short sale and a bank owned property are 2 totally different things and an agent that doesn't understand that is truly clueless!
Nestor must be in a totally different market. Here in Northwest Fl I my buyers have bought 10's of short sales and 20,000 of asking price is nothing. If your consistantly getting offers on short sales higher than asking then you are either just low balling properties which I doubt or full of BS and just trying to sell yourself on here. I have a client that just bought a gulf front condo for 170K te advertised short sale price was 256K. I ha danother home they had advertised at 275K we offered 185K and the bank accepted it...no where in this area do short sales go for more than asking price....and looking at the state figures it doesnt happen very often or they wouldnt be on the market on average over 200 days.
It's hard to remain polite when you have an unreasonable Agent on the other end(or who WANTS to be on the other end!) Luckily, it doesn't look like you'll have to deal with HER!
He may choose just one offer to counter or all. >>> Just wondering: you let sellers to counter-offer more than one offer at a time? What would you and your sellers do if more than one buyer ACCEPTS the sellers' counter offer?!
Wish I had a public version of this post to forward to certain buyers and their agents. I also just had a situation where I was threatened by a prospective buyer for not forwarding their offer to the lender. We'd received two offers below listing price at the same time. Seller chose to counter both equally. The other prospective buyer stepped up to the plate with a full price offer and a solid prequal letter. This buyer countered below. Seller accepted the qualified offer and we put together the package. Then the buyer who failed threw a fit at his agent, reluctantly came back wtih a full price offer, and demanded to have his offer submitted.
After much education, the second buyer reluctantly accepted the counteroffer paperwork putting them in back-up position. What a waste of time for several busy agents and a seller who is already feeling overwhelmed with the process.
BTW, with respond to Meir's question above mine, our short sale addendum would cover the situation posed as it explicitly covers additional offers. What does your Association have to say?
Aloha
Beth
Katerina,
Once apron a time you had to master the three "R's" to wear the blue one.
It's a sad state of affairs!
Keep up the good work.
Bill
Beth,
Additional offers its OK and I'll not wave our right to more offers (we do accept one offer at a time/send only one offer to the lender/s).
My question is about sellers counter offer more than one buyer at a time!?, while they have only ONE house to sell:(
Hi Katerina,
It boggles the mind that agents don't understand that in a SHORT SALE, the seller still owns the home. That is like the #1 DUH.
That being said, I do think (and this is just my humble opinion) that these short sale rules are a bit of a shell game, and ultimately, having the seller "approve" something that they ultimately have no real control over seems like a big waste of time.
I mean, really....think about it....the seller may technically "own" the house in the short sale, but it is the lender who gets to call the shots re if the offer is actually taken. If the seller signs off on an offer, and the lender turns it down, then, really, who owns the house?
Doesn't make sense. Either the seller owns the house, and gets to decide which offer to accept and for how much, or they don't.
Again, just my humble opinion.
Fire away. :)
As always, GREAT post Katerina! The sad thing is that the agents that NEED TO BE READING ALL OF THIS INFORMATION--don't even know what Active Rain is!! God forbid they should learn something USEFUL!
We always learn so much from you and Nestor. Keep it up!!
these are the kind of agents you get when its easy to get in the business ,,, experts ;-)
great post
If this story is varbatim..then.. Poor bastards who were short sold over the last year by agent.
This is what hurts the buyer and seller when agents don't understand the process. Don't get involved if you don't at least understand the basics. And don't give an attitude. I hope her buyer reads this.
Katrina, that's why I sometimes call my state Floriduh!
Coleen- It is a much deeper issue than that. In some states like CA, they don't have judicial foreclosures and the lenders keep the original deed to the house much like a bank keeps the original title to the car and therefore in those states, they have trust deeds. The homeowner 'trusts' the bank will turn over a statutory warranty deed to the the owner upon full pay off of their loan and the bank 'trusts' that the owner will fulfill their obligation to pay the loan off.
In Florida- we are a judicial state and a statutory warranty state. That means that an actual DEED is in the possession of the homeowner. THe owner signs a note, an agreement to pay back the money they borrowed from the bank. THe bank wants some collateral so the homeowner agrees to use the house he is buying offering it up as a mortgage allowing the bank to foreclose on that house but not without his day in court. The judge could find, like in some cases here, that the bank was bad and did awful and illegal things to the homeowner and some people now will never have to pay a loan payment again to the bank as the judge declares the NOTE null and void.
So the ownership here in Florida has nothing to do with the bank either. In a short sale the homeowner must first agree to all the terms not only that the buyer requests but also that his own lender may request. The owner can say no. He is under NO duty to cave in.
His choice is that he can choose to stay in his home and have the bank exercise their rights under the terms of the note to sue him for the money he owes. If he loses, and has to pay but has no money than the judge could tell the homeowner that the bank can take his home as collateral. They must go through the court system and the homeowner has a lot of property rights in our great state of Florida.
So the ownership is still ownership. The owner still has to pay all the lawn care, the HOA, the taxes and insurance, the owner still keeps the water and utilities on or at least most of the time in our market.
Katerina,
For the record the "trust" in trust deed, refers to a third party "trustee" not faith in the bank.
It's a small, but important point. The trustee is selected and maybe changed by the lender. Trustees are licensed and bounded.
I've worked under both "mortgage" and "trust deed" laws. I prefer "mortgages" with their judicial foreclosures, but only because I don't trust trustees.
Respectfully,
Bill
Katerina,
I am still laughing at Lenn's Comment.... LOL so pithy!
Bill- That was pun intended in my 'trust'.
Thanks for a great post. Infomation that too many agents need to read!
Katerina - I understand all of that. My point is that when it comes right down to it, an owner of a short sale does not have final say on whether or not the offer they've accepted via signing off with a buyer will actually be accepted by the lender.
The lender is not a party to the contract, but they do hold the note, so they have the final say...at least if seller wants to actually sell their house before it forecloses. Just seems odd to me.
Katerina - pure ignorance...Is it a bliss? Hardly, when it hurts Seller in the pocket! Some agents shall read and then re-read your statemen; simple and self-explanatory!
'A short sale is a bi lateral contract between a buyer and a seller. The seller's lender is not a party to the contact just as the buyer's lender is not a party to the contract. Neither lender signs the contract.'
With smiles,
Bo in Yukon
I do a lot of research via the MLS on distressed properties in the area. Countless times I email my realtor about a "REO" and it turns out to be a short sale. It amazes me when a property is completely misrepresented.
I do a lot of research via the MLS on distressed properties in the area. Countless times I email my realtor about a "REO" and it turns out to be a short sale. It amazes me when a property is completely misrepresented.
Coleen- The seller does not know nor can not tell if his lender will accept, counter or reject his request for a short pay off. Technically though, the seller does have the final say in whether he accepts his lenders terms and therefore at the end of the day, the seller still has the final say. I DO understand what you are trying to say and I do understand your point. I like to hang on to the belief that at least here in Florida there are still some property rights left.
Call your Florida State Senator and tell him/her to VOTE NO on the Bankster Bill- "Nonjudicial Foreclosure Act For Non-Homesteaded Properties "
THe Florida Bankers Association got Mike Bennett to sponsor this bill, call his office-
This bill is dangerous for all FLoridians, NOT just the non residents.
ALL THEY HAVE TO DO IS CLAIM THE HOUSE IS ABANDONED AND IT WILL BE SOLD BEFORE YOU EVEN REALIZE IT
CONTACT INFO
Senator Michael S. “Mike” Bennett – Sponsor
District Office:
Wildewood Professional Park, Suite 90
3653 Cortez Road West
Bradenton, FL 34210
(941) 727-6349
Senate VOIP: 42100
FAX (941) 727-6352
Statewide:
1-800-500-1239
Legislative Assistants:
Cheryl Ennis and Crystal Fitzgerald
Secretary:
Margaret Clark
Tallahassee Office:
322 Senate Office Building
404 South Monroe Street
Tallahassee, FL 32399-1100
(850) 487-5078
Senate VOIP: 5078
Legislative Assistant:
Jacquie Connell
Committee Membership: Banking and Insurance Committee,
Chair Banking and Insurance Committee
Then call your house reps and tell them NO to "The Florida Consumer Protection and HOmeowner Credit Rehabilitation Act " which is another bill that seeks to make Florida a Non Judicial foreclosure state. That will effect every single homeowner whether you ever go late or not. IT has already happened in Georgia where the banks come in to those who actually do pay their loans on time and plan to keep their properties only to have the banks come in and say they want the owners to make up the difference in loss of equity. The reason they don't pull that one off here in Florida is because the banks know the judges here would never let them get away with that.
"The Florida Consumer Protection and Homeowner Credit Rehabilitation Act to be presented to Florida state legislators by the Florida Bankers Association clearly reveals this organization’s goal; terminate The People’sconstitutional right to due process under the Bill of Rights (5th Amendment) and theU.S. Constitution (14th Amendment). If anything, it clarifies their repugnant aim of dispossessing more Floridians from their homes which, in most cases, were neither funded nor owned by the foreclosing entities. In 2009 alone 516,711 properties had foreclosure filings, if an estimated 65% are primary residences, then the number of Floridians who would have been evicted from their homes without due process of law would calculate out to be 839,655 (average2.5 persons/household)."