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Can you have an active short sales listing in the MLS and have a sale submitted to the bank?

There is a listing in the MLS. My broker called to show and the listing brokerage allowed us to see the property. No mention of a contract already submitted to the seller until asked for a property condition disclosure prior to writing an offer. None in the MLS.  The selling broker said that there was already a sale submitted however not accepted by the seller or the bank. They told my broker that if we wrote the offer it would simply be a back up to the first offer.  My broker said that it could take time however if we wanted to submit an offer he will write it up. That in most cases there isnt a back up but both would be reviewed prior to the acceptance ( if any) of a contract.  The one that benefits the seller and bank would probably get signed.  The Selling broker still hasn't provided the condition disclosure which makes me not feel like he will work well with us.  My brokers isn't discouraged and simply says he will eventually need to provide if we make it a contingency of the offer. Unless of course one doesn't exist
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November 12 2011 - Nashville
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Answers (5)

The policy towards handling that varies greatly from Board and MLS to Board and MLS.
Also, the usage and enforcement of these rules can vary as well.

In our MLS, a Realtor is supposed to immediately change the status of the listing from Active to Active with Contract.
However, in practice, this doesn't always happen, and isn't always in the listing agent/seller's best interest for them to do so.

If it's possible that the home may have had other offers, it's best from that standpoint to contact the listing agent ahead of time, and discuss the situation with prospectives.  Some clients won't even consider looking at short sales because the process is so difficult and drawn out, and generally there may be homes worth considering with cash owners or bank owners that wouldn't be so difficult.  However, with patience can come great reward!
Good luck!
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December 12 2011
Hi Rita... I wish that was the case here in Southern California. Our MLS has a field with an option to enter Offer Received/Accepted (or something like that) and remain as active.

I would love it if every agent used this option. It would make my job so much easier. Right now I call or email agents asking if there are offers on the property.
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November 16 2011
All good answers and advice to you.
I am in Louisville KY and our local MLS requires the listing be placed in contingent or pending once the offer has been accepted by the homeowner, even though the lender has not approved the offer.
Check with your local MLS for their particular rules and regulations with regard to short sale properties.
Good Luck with your offer.
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November 16 2011
Hi Big Brother,
I agree with Mike. It's absolutely ok for that listing agent to have that listing in the MLS as "Active." I'm experiencing this frequently in my market place and I tell my buyers to anticipate writing multiple offers. 

The other thing I do is before showing property to my buyer, I call all of the properties to see if there are offers submitted to the bank. If so, I will possibly bypass showing that particular property. 

Don't be discouraged in writing back-up offers. I've sold many homes where my buyer was one of the back-ups and ended up buying and closing. Encourage your agent to follow up weekly on the homes that are "active" until that home is "pending."

There are other rules that may apply to your state or area.

Hope this helps
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November 15 2011
To answer your initial question, yes you can have an active listing on MLS where the homeowner has accepted an offer with contingencies. Typically it is called 'an offer has been accepted contingent on third party approval'.

As it's necessary in a short sale to have bank approval, the listing remains active until the contingency (and other contingencies like inspection contingencies) is removed.

Your broker has given excellent advice regarding your offer being a back up offer (although technically it's not a back up until the seller signs one of the outstanding offers). And a contingency addendum would cover the issue of your not having the sellers disclosure. It's possible the homeowners put the property on the market without writing the disclosure, which might explain why there is a delay in providing the document.

I hope that your broker has made you aware that short sales can take longer (sometimes much longer) than traditional or bank owned sales. And if you end up second in line for the home, the wait could be too long. But if the broker is willing to write the offer, I would give it a shot. You might want to explore language in the purchase agreement that gives you an exit date should you not have an answer by a future set date. And make sure you won't be required to provide earnest money until the homeowner AND bank agree to the sale. This way your money won't be tied up and you can quickly exit the deal.
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November 12 2011
 
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