Expert: Connie Wildasinn-Broker,GRI,Realtor® - 7/28/2009

Question
QUESTION: My neice and her husband found a great home and made an offer. The house was listed at 260,000 and their offer was 253,000 with the seller paying part of the closing. Although their offer was accepted they did not understand that in a short sale the bank has to approve and can take their time. They have sold their current house and need to close on this one in a timely way. Was their realtor remiss in not explaining the ramifications of making an offer in a short sale. In your experience what do you think the bank will do?

ANSWER: Hi Catherine,

I can understand that it is heartbreaking when a home purchase doesn't go as the buyer believes it should.  ....Was their realtor remiss in not explaining the ramifications of making an offer in a short sale. In your experience what do you think the bank will do?....

Sometimes the buyer can be so excited or inexperienced that they only hear what they want to hear... and much of the negative or comments of the 'what could go wrong' are dismissed and not really heard... and then an issue arises and the client wants to know why they were not informed this or that could happen...not having been at the conversation table at the time it is hard to say that the realtor didn't explain... Short Sales can take months to complete and many still go to Foreclosure sale and then reappear months later as bank owned REO properties..

Then again they may be using a realtor who has not had much or no experience in the dealings of Short Sales...

In todays market place, the deal is not over until it is over... and many times it will take a lot of twists and turn...

If there is any silver lining... if your niece is willing to rent and keep looking after the sale of her residence is completed.. the market is still trending down... she could end up in a much better 'deal' buy renting now and purchasing say during the holidays... Oct, Nov, Dec ... best time to buy!


---------- FOLLOW-UP ----------

QUESTION: I thought we were done but I heard from my niece this morning. Another home just came on the market that they have had their eye on and they have made an offer on that. Their realtor has assured them they are not in any jeopardy re: the short sale house, but she is worred. The realtor says not to worry. Here's what I am thinking: the seller of the short sale house accepted their offer but the bank has not. Is this a loophole that would release them from the first offer? I can't believe any realtor would allow them to make an offer on 2 houses at once putting their earnest money at risk. Can you shed any light on this situation?

Answer
Hi Catherine,

You are correct to think that the short sale home is not an actual accepted offer... not a loophole, since the offer is not official as of yet... be sure a short sale addendum goes out that states in the effect... no deposit or escrow or inspection or contingencies to be started until WRITTEN approval from the lender with all terms and conditions agreed by all parties to the transaction... once agreed good faith to be deposited and contingency phase to begin..

I have had buyers make offers on up to 30 homes at a time... here in Calif there is a specific clause in the purchase contract that states... Buyer may be submitting simultaneously multiple offers... until all parties agree there is not contract.. and there is no guarantee a seller will accept the offer your niece has put out ...

good luck with offers...