Needing Urgent Advice about a Short Sale Home

Foreclosures, Short Sales, Tax Foreclosures
1

My wife contacted the listing agent for a short sale home that was listed. I think he mentioned that the house is currently in Pending. Approximately, a month later, he contacted my wife and asked if she were still interested in buying that home.

He said that since we do not have an agent, he would serve as a dual agent. For this reason, we would get the best chance of getting the house. In addition, he suggested that if we were to make an offer close to the listing price ($599,000), then he is 99% sure that the bank would accept the offer. He then said that if we were to make an offer in the amount of 10% less than the listing price ($585,000), then he is 95% sure that the bank will take it.

When we came to see the house, he voluntarily stated that this is his father’s home, and that he is listing it for his father, who bought it 2 years ago at $795,000. At the present time, the house is valued much less than that; hence, the short sales.

He told us that the commission that he gets from the home will go to his father and that he will not be making anything on it. That is why he was not willing to give us back 1% of the commission that we had asked for as other real estate agents had offered to us in the past. He also said that as a seller, his father has the legal right to submit to the bank the offer of his choice among multiple available offers. He said that it is his father’s best interest to sumbit my offer of $585,000 and not of those who have their own real estate agent making similar offer even if the offer is more than mine.

He was upfront about why he would do that since we have no agent, he would get all the commission and if he were to go with an offer who has another agent involved he would have to split the commission.

He seems to be genuine and fortwith with the facts of the situation. He also said that he does not think the bank would take an offer less than $585,000 since they already rejected the offer of $580,0000 from another buyer. The reason he suggested to us to make an offer of $585,000 is because, according to him, the bank would seriously consider accepting an offer within the range of 10% to 15% less than the listing price on short sales homes. He said this has been his experience doing real estate for the past 10 years.

BTW, the reason he also wants to go with us is because we already have an approved loan and that we will be puttting down a minimum of 40% for down payment. He said that he only has about 30-60 days to find another buyer or else the bank might foreclose on the home, something that he does not want to happen to his father. Also, after the bank rejected the offer of $580,000 from the other buyer, the bank told him to relist the home to see if he will get a better offer.

Here are my questions:

I am a little uncomfortable about his dual status, serving his father’s needs and mine. Should I be worried about this?

Is there anything that he said is plainly untrue?

Is it true that the the owner of the house can choose whichever offer among many offers to submit to the bank, even if the one that is being sent to the bank is not the highest offer?

What I want is to ask him to either help with the closing costs or give me back 1% of the commission and at the same not to offend him so that he would go with someone else. My husband and I really, really, really like the house.

Please HELP!!!

2

He is simply looking at for his own interests not yours. I had dual agent representation. IN my opinion in should be against ethics but it is not. Plus, even with 40% down in this market you must be careful about catching a falling knife if you care about future equity positions. If it forecloses you will still have the opportunity to buy it, on your own terms without an agent trying to maniupulate the deal. Don’t be a victim. Get sign-off from the realtor to allow you to negotiate directly with the loss mitigation department. Two years ago his father gambled and lost on aniticipated appreciation. Don’t do the same. However with 40% down and your intention to live there, by all means pursue it if you really really like it.

3

It is my experiance that the lender will only pay a total of 3% sales commission to agents. SO if there are 2 agents on a short sale they would have to split the 3% rather than the normal 3% to each agent.

The homeowner does have the right to submit the offer they choose.

If I were you I would verify the facts and terms of the short-sale and the $ amounts of the loans in default. You can do this via county records.

Feel free to send me a message and I can look it up for you if you do not know how to do it yourself. It just takes a few minutes to do if you know what your doing.

The time frame he gave you for foreclosure seems accurate, but it depends on how far behind the payments are. Again you can verify this yourself with public records.

It is in my opinion as an agent, broker and investor that it is HIGHLY unethical to be a duel agent on a transaction that you have a personal or vested interest in, i.e. family.

Best of luck
Chris

4

That last poster sounds like they were dealing with a nasty lender. We have great success negotiating for the agents that we deal with to receive their full commission. Without us being included in any part of the commission ourselves the lender many times allows this. As we used to work with the bank ourselves, we find that the REO Asset Managers that we are still acquainted with continue to give 3.5 to the buyers agent and 2.5 to seller (agent that represents the bank). If they are willing to give the full 6% after the sale… why not before? We do have a great background in this but it is important to know what in the right hands a negotiator that is assisting you close your deals can make it happen.

I have personally spoken to over 30,000 Parties, in my experience of helping homeowners with foreclosure problems, and would suggest to find someone that you feel comfortable with. Best of luck.

Regards,