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Foreclosures, Short Sales & REO's

Avoid Delay in Short Sales By Understanding Multiple Offers

Short sales are not for the inexperienced!

Unbeknownst to many listing agents and sellers, each time an “additional” offer is submitted to the bank (the seller’s lien holder), the process starts over, adding up to two months to the transaction, during which a foreclosure can actually occur!

There is often confusion between the agents, the sellers, and the buyers as to what is required of all parties involved when a second offer is submitted to the seller with a pending offer already in to the bank and awaiting approval.

While each State and board of Realtors has their own rules, our local Kona Board of Realtors states that any and all offers only must be submitted to the seller. Let us not forget the seller is NOT the lien holder or Bank, but rather the seller is the listor of the property!  It is the seller’s choice as to whether or not to submit an accepted offer to the lien holder OR accept the offer and advise the buyers and their agent that they are placing the offer in backup position pending the lien holder’s decision on the previously submitted offer.

For instance, sellers might choose to forgo an additional, top-dollar offer in order to simply close a transaction quickly. Choosing not to submit the offer to the bank could prevent buyers from becoming frustrated with the process of short sales, and may ultimately allow for more successful and timely transactions. In such a case, submitting the higher offer to the bank could slow down the process—and perhaps sacrifice the deal altogether.

Ethically, the Realtors involved should be sure that sellers understand the fact that they are in control of the offers and how they manage them is ultimately their choice. The outcome of such decisions needs to be carefully considered before a second offer is submitted to the bank.

Be sure your Realtor has adequate training and experience in short sales, and that you are in agreement with all parties involved before entering into such a transaction.

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Justin - Head Web Head

March 30, 2010

Interesting that you wouldn’t want to submit a higher offer, but I can understand. Short sales are tough to close, and you might kill a deal altogether if you submit that higher offer. Here’s an example of a Kauai short sale that could have sold with an offer of $585,000, but eventually listed for much less.

Justin - Head Web Head

March 30, 2010

Interesting that you wouldn’t want to submit a higher offer, but I can understand. Short sales are tough to close, and you might kill a deal altogether if you submit that higher offer. Here’s an example of a Kauai short sale that could have sold with an offer of $585,000, but eventually listed for much less.

Ron Margolis, RA, ABR

March 31, 2010

I think a buyer can submit a higher offer, but the success of a short sale is incumbent on the expertise of the seller’s agent. Recently one of our escrow companies has started offering a short sale service. Old Republic Title and Escrow is charging 900 for this service and for agents that don’t know squat, it’s a viable option.

Ron Margolis, RA, ABR

March 31, 2010

I think a buyer can submit a higher offer, but the success of a short sale is incumbent on the expertise of the seller’s agent. Recently one of our escrow companies has started offering a short sale service. Old Republic Title and Escrow is charging 900 for this service and for agents that don’t know squat, it’s a viable option.

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