DR left this comment this morning:
“We recently wanted to put an offer in on a “short sale” home we had been hoping would go up for sale. We had been watching for this home for two years. (The home has not been approved for short sale yet.) The real estate agent already had 5 offers and told us not to bother. He had made a deal with the seller to take the home off the market as soon as he got what he thought would be an acceptable offer for the bank. He was going to present the first offer and use the other 4 as backup and wasn’t interested in our all-cash offer. Is this ethical on the part of a realtor? He can decide which offer he wants to submit to the bank and stop additional bidders?”
There are no rules, no guidelines, no expectations from banks; there is literally nothing regulating how short sales are sold.
The listing agent is the sole decider on how the process happens, and you are at his or her mercy.
1. At least once a day I see an agent input a new short-sale listing onto the MLS, with the note that they already have an accepted offer.
2. I regularly see listing agents representing both buyer and seller after leaving the property active in the MLS for months so they can shop it around.
3. You see sellers more willing to show the home to buyers sent by the listing agent.
Is there payola between listing agents and sellers? You can come to your own conclusions, but until the MLS starts enforcing some rules on how short sales are sold, expect lots of funny business.
I’ve seen it myself. “Maximum Shenanigans” is a great way to describe the current housing market. Unfortunately housing bubble mentality of 2005 is still alive and strong in SD. People are still willing to throw caution to the wind when buying a house and shady agents are more than willing to oblige.
A family member put in an offer on a house with the listing agent. The offer never was presented to their client. The excuse was the listing agent was too busy. So the offer expired.
Are any laws being broken? It sounds like our new friends in the FBI need to set up a sting and make an example of one of these crooks.
Different thought… along the lines that the Realtors need to enforce their own codes.
How can their be nothing about how short sales are sold?
If there are no specifications for short sales, then they should be treated as standard sales.
If the seller accepts a bid and are the owner of record, then it’s off the market, right…
Or are short sales the unregulated derivatives of the housing market… in which case, the MLS needs say that they can’t be listed. Sure that would drop inventory.
Realtors will be realtors. *sigh*
Why don’t the banks set up a direct bid system for their REOs and short sales? Buyers should/would submit directly into a bank-controlled database system, bypassing the real estate agent.
I swear, the whole real estate system seems screwy..
Real estate is shady business. Does anything really surprise anyone anymore? I’m sure some senior figure here will tell me back in the good ol’ days you could get a fair deal, with minimal negotiations, honest players and no posturing.
Bids are just that, Until you enter escrow, you do not for all practical purposed have a deal with the seller! Is that legal with signed contract, probably not, is that a fact ya!
If you submit a bid and agents says they will not submit bid. ask/demand refusal of offer in writing. Thats legal and should cut down a little on this sort of thing
If you feel that an agent has done you wrong, call the agents broker. That is who the agents working for and its his reputation on the line!
He/she will investigate and get back to you. Will they admit wrong, probably not, will they fire an agent. Oh yea!
Big E wrote:
Why don’t the banks set up a direct bid system for their REOs and short sales? Buyers should/would submit directly into a bank-controlled database system, bypassing the real estate agent.
I swear, the whole real estate system seems screwy..
—————–
That would be too logical, too efficient, and most likely to have the fewest fraudulent deals. But then…the “players” couldn’t play their games. Can’t have that, can we?
The NAR made sure the banks were FORCED to use agents. No kidding.
——————-
Frequently Asked Questions: Banking Conglomerates Permanently Barred from Real Estate Activities by the FY 2009 Omnibus Appropriations Act
Q1. How did NAR finally succeed?
NAR worked hard to block the proposed rule ever since it was published in January 2001 by convincing Congress that the rule was inconsistent with banking law, bad for consumers, and bad for banking.
http://www.realtor.org/banks_and_commerce.nsf/Pages/banks_permanently_barred_faqs?OpenDocument
I guess I just don’t understand banks. Why is the process as it stands in their best interest? They won’t be recovering as much money as they possibly could from this loan-gone-bad by allowing an agent to end the listing and submit only one of the four or more offers.
P.S. The offers on this house already have it priced above current market value, but we live in the neighborhood and were willing to pay a premium to retire into a smaller home in the area we want to live in (Mt. Helix).
I think the first weird thing with short sales is that the listing agent technically works for the home”ower” not the bank (the one that actually OWNS most–if not all–or MORE than all!–of the home).
So you have a homeowner who can say no more showings–just submit what you have, to his/her listing agent. Or worse, give them carte blanche to decide.
Then the bank–not the homeOWER–has to approve any offer because it can’t be sold without paying off the bank or getting them to agree to take less.
It is a very weird situation and rife for inside deals.
I don’t know what the rules are here, but I had a conversation once with a realtor in Colorado. There, the rules are you must present all “bonafide” offers. But if the realtor thinks it’s a scam or a waste of the client’s time, they don’t have to present it. Only if they think it’s “real.” (Whatever that means to them, I guess.)
I too, thought all offers had to be submitted unless frivolous (and I’ve even had a few of those work. LOL). Of course, the rules are only as good as the Realtors that abide by them.