Multiple Offers On A Short Sale
Real estate agents and home owners alike seem to not to know what to do with Multiple Offers On A Short Sale. In short (no pun intended here), the offer process works almost the same as a traditional transaction. A Binding Contract occurs when two parties sign and agree in writing to terms. In a short sale, this is no different. Two parties agree to upon the terms of the sale of the house and thus the contract becomes binding. The big difference in short sales is that there is a contingency in place that basically says, “Contingent on Seller’s Lender Approval.” The key here is understanding that the bank is an interested third party.
One big mistake most real estate agents make, is that they think the home owner no longer owns the home. In many cases, they assume that the bank is the owner and that they want to treat multiple offers on a short sale the same way that a bank might treat “bids” in a REO sale (often called a foreclosure sale by buyers).
Can there be multiple offers on a short sale?
Yes! There can, but it’s situational. If you get multiple offers at the same time, then the seller and the listing agent decide what is best for the client. If another offer comes in after the seller has signed the contract then the seller can take the offer as a backup.
What can’t or shouldn’t happen with multiple offers on a short sale is for the seller to sign two (or more offers) to present to the bank and/or send back to buyers. If a home owner signs multiple offers, they are obligated to multiple individuals to sell them the home under those terms. In addition, most banks will tell you now, that their long standing policy is to work one offer at a time, mostly because of the work load.