Under Contract In A Short Sale "Upon Lender Approval"
My wife and I made a low offer on a Short Sale home that is in the redemption period of foreclosure. The owner signed the offer immediately with a line stating "upon lender approval". The seller has just accepted a higher backup offer and we haven't heard if the lender approved our contract yet. Can the lender simply not approve our contract and take the higher backup offer? Do we have an opportunity to negotiate with the lender even though we are already under contract?
Thank you for your attention to my question,
Jason Holliday
:-? :-?
Who is running the show? You? (no, not you) The Seller? (maybe) The Seller's Broker? (maybe) or a third party short sale facilitator? (maybe)
Better find out who is spearheading this transaction... and, if possible, try to devise a compelling proposal that will accompany the application to the mortgagee.
[addsig]
Thank you for your response. I assumed that the lender is the one in the drivers seat of this deal. How do I find out who is running the show? Can I ask the seller's realtor for information on the agreement between the seller and the lender?
Thanks!
Jason
The lender isn't usually the driving force in these matters... Sure, they are in the driver's seat insofar as approval/rejection... but it's the Seller who must make that effort... usually with the help of a skilled real estate broker or a third party facilitator (such as myself).
You must ask the Seller who has devised the Proposal, or at least who has initiated the process with the lender.
[addsig]
I took her statement to mean that the Seller made it's acceptance of the Offer subject to mortgagee (short sale)approval... rather than a 'counter-offer'
I haven't had a refresher real estate licensing course in 20+ years... is this
'insertion' considered to be a counter-offer... or a contingency?
[addsig]
Cheryl - I apologize for being unclear. The sellers requested that we add the statement "upon lender approval" to our initial offer. We added it, resubmitted the offer and the seller signed it putting us under contract. We didn't make them formally counter. In your experience, do you think we will receive a counter from the lender or the seller if the offer is too low? The seller didn't seem to care what our offer price was and now we are concerned that we didn't get the chance to negotiate the price into an acceptable position for the lender. It is my concern that the lender will reject our contract and accept the backup contract.
Would it be a good idea to add a line in the contract stating that the seller cant accept any backup offers unless the buyer allows it in writing.
will this work for that just fine? or does the seller have a right to accept backups by law or something?
Thnax
The seller signed and faxed back our amended offer. That placed us under contract as the first in line for the property. The other agent told us that they had accepted and signed a backup offer in case our offer falls through. The other agent is new to real estate and realized that he shouldn't have given us that information after the fact....unless he was lying to leverage our offer. My realtor is very good but new to purchasing short sale properties. So we aren't sure what to expect next.
Is there a chance that the seller's lender will still want to negotiate our offer? Or is our contract set in stone?
Joe - I think it's too late to make any more changes to the contract. It is also my understanding that sellers have the right to accept 1 backup contract.