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Short Sale: Do all offers go directly to the bank?

Can they be rejected by the sellor or the realtor without submitting to the bank?
  • December 10 2010 - US
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Answers (5)

Typically, the current owner negotiates the deal with the potential buyer first and then the "accepted" offer is presented to the lender for consideration.  In my experience, it's less frustrating to all parties if the short sale has already been "bank approved".  You want to use a Realtor who has had short sale experience and who knows the right questions to ask the listing Realtor before an offer is even initiated.  Best of luck. 
  • December 10 2010
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These are all great responses by respectable pros.  However, what I do know and they do not is that virtually all short sale transactions at this time are fraudulent.  To date we are seeing 100 per cent.  The reality is about 98 per cent.  The question you need to ask yourself before proceeding further is do you want a title that was falsely transferred to you?  Do you want to deal with that issue 3 or more years down the road?  Do you want title insurance?  More and more title companies are refusing title insurance simply because they cannot prove who owned the owners note and therefore the sale is being conducted fraudulently.  Don't blame your agent, 99.9 per cent of them are clueless on this issue because those they trust are not being honest with them. 
  • December 10 2010
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No, they don't all go to the bank.

In most cases the owner looks over the offers and decides which to send to the bank for their approval. The end result is there will be no contract to buy without the banks approval, but there is nothing that says all submitted offers will go to the bank. In today's "bottom feeder" environment there is no reason to clog up the short sale buying process with silly offers, so the owner decides which to submit.
  • December 10 2010
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The current owner is still the owner of the property during the short sale and can reject an offer with the same limitations as the owner in a regular sale. The owner of a short sale can also stop the short sale from proceeding. Accepted offers are sent to the lender for consideration.

The agent must present all offers to the owner.
  • December 10 2010
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Yes, short sale offers can be rejected by the seller before without being submitted to the bank.  Even though it is a short sale the contract is still between the buyer and the owner, with a contingency of lien holder approval.  If a seller gets a crazy low offer that the believe that the lien holder will not consider, submitting the offer could tie up the property too long for nothing.  This can hurt the chance of getting another offer that is more reasonable.  A sellers agent should help guide you in this process.

  • December 10 2010
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