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Short Sale Contract - Broker will not Submit, help!

Hi!  Thank you for looking at my question, I hope you can help.  Three weeks ago, we made an offer on a short sale.  The seller accepted our offer.  The broker held the contract without submitting to the lender, as there were some issues with the second that they wanted cleaned up before they submitted.  In the interim, the seller thought she might get in trouble with the lender and wanted to back out and not submit.  The broker is now refusing to submit our offer.  Does the broker have a legal obligation to submit an offer to the lender for approval once it has been signed by all parties?  We still have 45 days, during which we are tied to the seller because of the U-9.  Thanks in advance for your help!
  • March 10 2013 - Idaho Falls
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Answers (6)

Depending on your state, the broker should submit an offer within 24-72 hours.  The broker may not be familiar with working on short sales.  They've got nothing to lose by submitting the offer, and offer in hand will help the lender make better/quicker decisions.  Submitting an offer on a short sale is ambitious if you are in a time crunch because lenders don't work on your time schedule.  Best of luck!
  • March 10 2013
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Profile picture for sturg11
Hi Jared,
Thank you for your response.  Is the broker legally obligated to submit the offer?  They did not submit, and are now refusing to do so.  It has created quite an impasse, as we are still in contract with the seller, but nothing can move forward.
  • March 10 2013
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Short-Sales are unlike any transaction known to man.  There are no rules, guidelines, map or book.

Depending on the situation, many 1st lienholders require the subordinate liens to be negotiated first.  So in this case, the agent would submit the offer to the subordinate or junior lienholder for approval.  The they submit the offer to the primary.

I typically open the Short-Sale with both lenders, and submit their packages as quickly as possible, although this can backfire sometimes, when the 1st approves, and the Junior has not. 

These are complex and difficult transactions.  About all you can do is wait and hope for the best.

80%+ of Short-Sale transactions fail for various reasons.

Remember its not the seller that makes the decision, it's the lienholders.  They can ask for more than you are willing to pay, they may sell the loan to another investor, they may choose not to agree to Short-Sale, the seller may get a mortgage modification.  All possible reasons.

I never make any promises to anyone dealing with a Short-Sale.  it's a best efforts type of transaction.  We do the best we can.  Nobody gets paid if it fails.
  • March 10 2013
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The broker is legally obligated to present the offer - to the seller.

They have done so and the seller has now decided they don't want to present the offer to their lender for 3rd party approval. So technically it's not the broker refusing to present the offer to the bank, it's the owner of the home (the seller).

The broker cannot negotiate on behalf of the seller without permission from the seller. And if the seller opts not to present the offer to the bank (and presumably give their broker the right to represent them to their bank), the broker cannot legally present an offer.

In other words, blame the seller and not the broker.
  • March 10 2013
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It's not really a short sale unless the bank has approved the price they are listing the house for before it's listed. 

When the owner says "I think I will list my house for 50k less than I owe and hope the bank takes it" it is a pipe dream and a waste of your time. 

Deciding to allow a short sale is not something the bank does in a just a day or two. In fact, it seems that they sit on that decision as long as possible. 
  • March 12 2013
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Broker is obligated too submit all offers to the the lender If the lender has another offer they can refuse too look at the other offer until the first offer is off the table
  • April 22 2013
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