We have been in a short sale transaction for about a month now. The seller approved our offer and it was submitted to his lender. For about 3 weeks our agent was told the lender was still considering the offer. A few days ago we were told we had verbal approval and the written approval was coming soon.
Last night the seller’s agent called to say the lender had approved the sale not to us but to a Short Sale Specialist company that had been enlisted by his client to buy the home.
So while we though our application was being reviewed the seller was actually working with another buyer.
Has anyone heard of this before, do we have any legal grounds here since we had a contract with the seller? I would think the lender/seller would be required to disclose the other offer to us and that we would have to cancel our contract in order for them to proceed?
We are concerned we lost to property due to unethical behavior on the seller’s part.
Hi Madmiller,
Sadley but there are a lot of these going around where realtors are letting other investment companies initiate short sales offers. While the offer is going on, the realtor has the property advertise as “Not under contract” to draw in the real end buyer. Once the short sale is approved, they let the end buyers know that its appproved but that they will have to buy the property from the investment company. This gives the investment company an opportunity to make money off of your higher purchase price. At times the realtor involved will also make a little more money.
Its a shady game and if done incorrectly a lot of people can get in trouble.
That happens from time to time, I always ask “are you WORKING WITH ANYONE ELSE at this time” and ask them a few times, many feel that they are somehow putting themselves at a disadvantage by being honest with you. I’d rather get a hang up early on than go through the process and find out like you did that you just wasted a month.