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While shortsale house waits for bank approval can the seller entertain additional offers?

A house I was looking at is a shortsale house.  I know it currently has an offer that is very low on it.   The offer has been presented to the bank but is in that long holding period.  Can I make an offer on this house that can also be presented to the bank?
  • April 14 2010 - Savannah
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Answers (11)

In a Short Sale ALL offers must be presented to the lender.  The SELLER can only have one executed contract but the lender gets the new offer anyway.

The lender gets a Broker Price Opinion (BPO) and if the BPO is considerably higher the lender sends back the counter offer.   If the deal dies for lack of acceptance the lender goes to the next offer in the stack and has the SELLER execute a new contract if the BUYER is still in the deal.  They will repeat this as often as they have toe to till they get to the buyer taht they can work with

  • June 07 2013
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Seller's can entertain offers up until closing. In most states, the seller's agent is obligated to present all offers to the seller unless instructed not to by the seller.
  • June 07 2013
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Since the seller has already accepted an offer, he's in contract. But the seller can always take back up offers. It's up to the bank to decide if they will want to see backup offers as they come in or if they will wait until they review the first offer. Each bank has their own policy. 

In the most common scenario, backup offers are collected in the event that the first offer is rejected, the buyer walks, or the bank can't come to terms with either the buyer and/or the seller.

I've had many clients buy properties that were short sales, and they were originally in a back up position. Short sales can take time and many buyers don't want to wait around. If you're patient, things can go very well for you. As a backup offer, you are not in contract so you can continue to look for another property. If you find something else, great. But if you are still looking, and this property becomes available, then you're ready to step right into the transaction. And you will know up front what the bank is looking for because the bank has already responded to the first offer. You will have less surprises.

So I would definitely suggest you make a backup offer. You have nothing to lose!
  • June 06 2013
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You can make an offer on the home, however, the seller does not have to accept it and choose not to present it to the bank. It's best to have your Buyers Agent give a call to the Listing Agent to see if the Seller would even consider entertaining other offers.
  • June 06 2013
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NY State says YES. All offers should continue to be presented.
The seller's bank sometimes says, no, they don't want to hear any offers until the current one is finished. 
  • May 04 2011
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You can make a back up offer. Since it takes such a lengthy time for the banks to approve a short sale the buyer with the first offer might have already bought and moved on when the approval comes through and then your back up will be next in line.
  • April 21 2011
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Yes you can make an offer on the house.

  • August 13 2010
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In short sale situations, I only take offers subject to bank approval.  This way, even once the sellers accept the offer, it isn't binding until the bank approves it.  If another, better, offer comes in before that happens, then that is in my seller's best interest.  I make sure to disclose to all parties that it is a multiple offer situation, no bidding involved, and to submit their "highest and best" offer.
Best of luck,
Meg
  • August 12 2010
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If the seller and the bank have not fully accepted the original offer, then the original contract is not considered binding. If you have an agent representing you then you should have your agent ask the listing agent or the seller (if no listing agent) if they are in a binding contract.  If the answer is "NO" then you could submit an offer and the bank would most likely review both offers.  In some of these cases I have seen the bank reject both offers and ask that all parties resubmit their highest and best offer. 

Please note that in many cases the listing says that any and all offers must be approved by the lender to be considered binding. In this case even if the owner signs the contract it's not considered binding until the bank approves the contract and the sale of the property at a price short of the payoff amount.    
  • April 14 2010
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Profile picture for Jarvis Team
Not unless the seller (the legal owner) decides to sign your offer and submit as well.  The challenge might be being under contract with two buyers.  Could be a sticky situation.

Some agents DO submit all offers (even though none of them are binding) to the bank in a "bidding" process.  I don't recommend participating in this type of process.
  • April 14 2010
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It depends on two things.

One, if the pending agreement allows the seller to continue to market the property while the offer is waiting approval from the bank.

Two, if the bank is willing to view more than one offer at a time. Sometimes the bank is willing to view one offer at a time, which would make your offer the 'back up' offer.

Often the listing agent will have info on MLS that tells another agent whether or not backup offers can be accepted.
  • April 14 2010
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