Do ALL Short Sale Offers Have To Be Presented To The Bank?

The question is do ALL offers have to be presented to the Lienholders/banks on a Short Sale? This is a question that comes up time and time again. if you go out and ask 50 Realtors this question the chances are you are going to get a couple of different answers. The answer should be simple....YES they do. There are Realtors out there that will disagree with this statement. Under a normal sale transaction in North Carolina the seller and buyer negotiate a sale price for a home. Upon agreeable terms to both parties a revised contract is written and signed by the seller and the buyer. The buyer goes through their due diligence period and closes on the house. On a short sale, everything is the same until you get to the diligence period. After the seller and buyer sign the offer it is then sent to the bank for APPROVAL. yes, I capitalized the word. it is very important to understand that just because the seller and the buyer have agreed to terms the bank does NOT have to accept them unless it makes financial sense to them. A seller cannot terminate an offer and accept another offer because the terms are better than the first offer. A seller can notify their Realtor to inform the buyer that they will accept the offer as a back up offer on the house. That part is correct when Realtors say the seller will only entertain one offer and all other offers will be placed as back up offers. However; here is where the confusion comes in. Just because the seller has accepted the offer as a backup (which is the legal and correct thing to do) does NOT stop or preclude the listing agent from presenting the offer to the lien-holder. A lien-holder has a vested interest in the property as a third party. it is being asked to release a lien on a house without getting fully compensated for it. Thus, as a Realtor we are required to disclose to the lien-holder that there is another offer and the terms and conditions of that offer. it has become a material fact to the lien-holders interest in the property. What a lien-holder does with that information is for another blog post.... But as a Realtor we are required to present all offers to the seller and notify any lien-holder on a short sale of a subsequent offer....If your Realtor is not doing that, they are violating the rules and laws governing us. So, if you have your home on the market as a short sale and signed off on an offer and received another offer; what did you do? What did your Realtor do? Dave diCecco Realtor/Broker www.davedicecco.com