Declined offer by bank in SS

When the bank refuses an offer in a SS and the seller has already signed a P&A do we as the buyers have to change the P&A as we negotiate with the bank and they counter offer? Or do we just continue with the same P&A and continue negotiation with the bank using the counter offer form?

Also, should we update the seller on the negotiations or is that between us and the bank and then just notify the seller when an agreement has been reached? Basically, how much info regarding purchase price does the seller need after they have completed the P&A?

Thanks for everyones help, I love this forum! :biggrin

what does the pa say?

You don’t need to change the PA or tell the HO usually but you should have explained the process to the HO in the beginning so they know what is happening.

Helps to have a custom SS PA too which addresses some of these points and others about SS.
An attorney can alter the standard PA for you.

Many of the lenders I have dealt with say that they require a new signed contract between you and the homeowner with subsequent offers. Always keep a good repore with the homeowner. Even if you have a POA you may need the seller in the future.

Keep the seller informed as much as feasible. After all it is their credit you are dealing with. You do not have to disclose to the seller what you are offering. Just have them sign 2 or 3 contracts without the purchase price. Inform them that you are waiting to see how much the bank wants for the property before you submit an offer.

Thanks, that is good advice, because I was leary of letting the seller know the offer price, so that is a good approach.

I understand the desire to keep the purchase price from the homeowner. Sometimes they are hurt by what you are trying to buy their home for. But I think it is wrong to hide it and possibly leaves you open to litigation.

Just be up front with them about the fact that you intend to make a profit on this. But since the price does affect the homeowner in as much as they may pay tax on the shortfall, I don’t think it should be hidden from them.

Are you a legitimate investor or a scammer? A legitimate investor is not ashamed to be open and show the homeowner what is happening. A scammer hides things. You don’t need to scam people.

Let’s say the whole transaction takes place and the homeowner is kept in the dark until the 1099C comes. If he doesn’t like it or expect it, he could easily sue you for taking advantage of him. Having him sign 2 or 3 blank PA’s is not exactly kosher you know.


I understand your point. I am a legitimate investor, therefore I understand the importance of honesty. In the SS that I am doing now I told te HO what I was offering and she was upset, but I also told her that I am in business to make money and this is just how it is. Thanks for all of the input on this topic.

Homeowners are sometimes very emotionally attached to their homes. Dealing with the HO is the part of SS I dislike the most. I feel very bad for them and guilty sometimes.