It’s another Kansas City Short Sale, Why Can’t We Submit Multiple Offers?

Four weeks ago I listed a home in Lenexa, Kansas. A “shortsale”. We received offers that ranged from $185,000 to $250,000. Yes, all of the Buyer’s and their Realtors viewed the same property!

Them we received a backup offer for $275,000. Humm.

The Buyer’s Agent asked me when we would deliver to her Buyer a signed, executed contract. I explained we had already submitted an offer to the Lender,and at this time we would need to wait for a response on that offer.

“Why wouldn’t the Lender simply take the higher offer?” The Buyer’s Agent was upset.

Buyer’s Agents will contact me and ask what the next offer is in an effort to determine their client’s interest in the property. And since so many of these are great deals, who can blame them? In most cases, additional offers are welcome, yet the Lenders prefer most times to negotiate one offer at a time.

A little background....

A short sale listing is a property that is marketed at less than the mortgage value, and can only be sold with the permission of the lender, and the Private Mortgage Insurance, (PMI) company.

The PMI company determines the value and nature of the loss, and therefore gives the final yes or no.

We take pictures, we market the home, and if we do it right, there are plenty of offers....especially true since in order to get the home under contract quickly, we oftentimes need to market these homes beneath “Fair Market Value”....Oftentimes the Seller are “upside down”, and owe more than the home is worth. The Lender believes most often that the Seller/Borrower owes exactly what the home is worth.

And there is the rub. “Fair Market Value” for the Lender is different than “Fair Market Value” for the market. Make sense?

So we reviewed the offers for the short sale....The client asked for several items;

-Financial History
-Hardship Letter
-Payoff Estimates
-Listing Docs
-Comparative Market Analysis (CMA)

HUD-1....The HUD-1 shows all of the fees charged on all sides of the transaction...and is only valid for a single transaction...And for a single offer.

Most lenders prefer to negotiate a single offer because their internal processes involve several departments. Each department plays a role in reviewing the offer, the property, and the Seller’s ability to participate. (Read another way, “Is the Seller suffering enough to qualify for a short sale?”)

To add to the complexity, there are many variables that each department considers prior to delivering an approval. Sometimes these variables conflict with one another.

Short and sweet; we can sell each property a single time. Only one offer may be executed by the Seller, and presented to the Lender as a contract. When executed by one of two parties, the documents are still only an offer.

And that one offer is delivered to the Lender for their review.

If this sounds hopelessly complex, that’s ok. Call me and we’ll walk through your situation and your home. If there is a solution, we’ll find it.

Should we talk?

Let us know what you think or add to our blog by writing a comment.

Blog post written by the Dowell Taggart Team of RE/MAX Best Associates

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It’s another Kansas City Short Sale, Why Can’t We Submit Multiple Offers?