Does my listing agent have to submit all offers on Short Sales to the bank if it is a TARP bank?

The question is does the listing agent have to submit all offers to the bank after the seller has agreed to a price and the offer is waiting bank approval?
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September 09 2009 - Seattle
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Answers (7)

I disagree with those who feel that the seller should sign all offers and then all offers should be submitted to the bank. The reason I feel this way is because it's simply not fair for buyer #1 to submit an offer, and wait months for the bank to gather documents, order BPO's, gain approval from the mortgage insurance company and bank underwriters, and respond to their offer, only to have buyer #2 jump in and steal the deal at the last minute.

Additionally, this practice could put the seller into a bad situation by agreeing to sell their home to more than one person. Sure each offer is "subject to bank approval", but I've seen it where 3-4 offers are all acceptable to the bank and the seller has agreed to sell their home to 3-4 people.

The agent only has fiduciary duties to the homeowner. He also has the duty to treat all signatories to a transaction fairly. By continuing to solicit other offers after having first accepted one, the agent has to find a way to be fair to buyer #1. Since soliciting other offers has no benefit to the seller (since the seller is going to walk away with nothing anyway), the fair thing to do for all parties involved is to accept backup offers (but not send those to the bank), and only negotiate the first offer and work that one until dead or done before submitting any others.

Additionally, if after waiting months for an answer from a bank, a second offer if submitted to the bank, the standard practice for most banks is to turn both offers over to a new negotiator. This process delays the bank's answer pertaining to the first offer and isn't in the best interest of the seller or the first buyer.
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October 11 2009
Your listing agent is working for the seller and in a short sale the seller is the owner of the home and the bnank, they need to work hand in hand with the buyers and with purchase agreements.  All offers should be presented to the bank after the owners have signed them.
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October 11 2009
In most situations, the listings agent has fiduciary duties to the seller/homeowner, not the bank. The agent must submit all offers to the seller, not the bank. When an offer comes in, the seller signs it "subject to bank approval". The seller cannot agree to sell the home to more than one person, so the seller should not accept other offers, except as back-up offers, in case the first one falls through.

While the seller could accept a second offer "subject to cancellation of the first offer", sending that to the bank can restart the entire timeclock.

I don't see where the agent would have any duty to submit all offers to the bank.
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October 10 2009
It depends on the box checked on the 22SS.  The problem is you will never know if yours is submitted or not...
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September 19 2009
Profile picture for asugradinwa
I just put in a Short Sale offer in Snohomish County a couple weeks ago.  Check with your agent when making an offer to see if on the Short Sale Addendum you can get the Seller to agree to not taking any other offers (checkbox #3 on my form).  Unless the credator of the Seller requires all bids you can make sure that your bid will be the only one being reviewed.
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September 09 2009
Unless the bank has specifically requested that they will look at only one offer at a time, the listing agent is compelled to present all offers to the homeowners and the bank until all parties to the initial purchase agreement finalize the contract.

Usually a listing agent will refer to other offers as 'backup' offers which come into play should the first deal fall through.
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September 09 2009
Profile picture for Mr Caveat
yes, until the deal is done it is their right to sit on their lorals and collect offers. your agent is required to furnish them with all offers until someone has a signed contract with the signature of a bank rep
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September 09 2009
 
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