How Should Agents Handle Multiple Offers?
The simple answer is: by remembering one key thing; the homeowner of the property is the seller, NOT the bank.
Too many so-called real estate professionals get this completely wrong. First off, all offers must be presented to the seller and it is the seller’s decision, with the professional assistance of their real estate agent or attorney, to review those offers and decide which one they should sign and accept before submitting to the foreclosing lender. They can only accept one offer!
The important thing to realize is that some foreclosing lenders get over 1000 new short sale files on their desk everyday and if you fax in every offer that is submitted on your property then it simply will not get looked at due to the fact that they are overwhelmed and understaffed already.
Let me give you a visual picture on how the Countrywide Home Loans loss mitigation department works. First off, they have 3 different phases they run your short sale through. From the time you fax in your short sale package, it typically takes between 1-2 weeks for it to get assigned to a Phase #1 negotiator.
Phase #1 is the stage where they collect all of your paperwork and make sure you have all the proper documents required in the short sale package (which includes ONE offer). Please see www.shortsalemanagement.com for a copy of our short sale package. The phase #1 negotiator is also responsible for ordering the appraisal (unless it is a Fannie, Freddie, or FHA loan, and then the Phase #2 negotiator orders it) and collecting the report once it comes back. Phase #1 can take anywhere from 10 to 20 business days to complete so the file can advance to Phase #2. The Phase #2 negotiator is responsible for reviewing the offer and appraisal together and making a final decision. They are essentially checking to see if the offer submitted fits their acceptable short sale guidelines when compared to the appraised value. This stage takes anywhere from 30 to 45 business days to complete. Once it is complete (and only if the offer is approved) it is moved to Phase #3 which is their Settlement Phase. The Phase #3 negotiator is the one that issues the written approval letter and is the contact in case any issues arise during settlement.
Now, let me give you another key point with Countrywide, “if” you submit a new offer after the process is already well underway, then they WILL quite possibly send your file back to Phase #1 and the short sale clock will start then! Just because you’ve submitted a new offer!
The bottom line and the big take away here is: when you do get multiple offers and at different times during the short sale, have your homeowner sign one contract and submit one contract! After submitting that contract encourage outside buyers to give back up offers and when you do get back up offers do not send them into the foreclosing lender UNLESS they tell you otherwise! They are too overwhelmed and you may be hurting your homeowner’s chance at a successful short sale when you thought you were helping! For more real estate industry articles and videos visit www.RealEstateBusinessMentors.com or visit www.AskBobLachance.com for any real estate questions.
Thanks!!! Why don’t more Realtors get this???
I don’t think most realtors get this because in my experience, I have not yet met a realtor that knows how to really do a short sale the way Patrick and Bob teach it.
I have a question about short sales… I submitted an offer for a house, it was the highest offer and all cash. The seller chose to go with a lower offer that needed a loan. The seller did not have a lock box and met all people submitting offers. Seeing that she chose a lower offer, and met the potential buyers, is this in compliance with the Equal housing act? I thought that sellers had to take the best offer.
Maire,
A seller can accept any offer they feel is the best to them. If they choose to take the lowest offer and in turn the bank loses more money than that is the seller’s choice (not a smart one) but still their choice.