Gail, well, now you know that next time you get an offer from this particular agent, to write in any counter offer that he/she has to to present buyer's deposit in certified funds with x days of execution or the offer is voidable.

I'd be interested to see what legal had to say about it, since the buyers' intention from the get-go was to sign a legal document and not perform (as opposed to, oops we made a terrible mistake and want to change our mind).

The line that then gets blurry is, is the agent acting in clients best interest by not disclosing -- or are they acting in concert with the buyer to fraudently withhold information that would hinder the seller's ability to make an informed decision?

The other question is, would specific performance come into it?

Also, don't your escrow companies slap a cancellation fee on the parties? How do they collect it without any earnest monies?

If a buyer wants to make multiple offers on properties, fine. But we're disclosing it.

I ask the buyers, "Are you prepared to buy [x number of] houses if the sellers all approve and deliver the executed back to you?"

Having thought all those thoughts out loud . . . someone call Gene, he's sat on ProStds boards. He would know this one!  LOL

Gail, this is why "used" or "previously owner" car salesman rank ahead of real estate agents in public perception for ethics. You won't find this "buyer" pulling this kind of activity at an auto auction. Of course, the agent learned it from his broker - who is most likely a voting member of the NAR and the local board. We see the enemy and he is us.

In our state, all material facts must be disclosed to both buyer and seller, at time of offer seller has the right to know if the buyer plan to close the transaction.  Once the buyer's agent learns that the buyer has no intention of closing, that buyer's agent by rules and regulations is required to inform the seller.  I also believe that the seller should be informed of what the buyer is doing, because that material fact could/would make a difference in the sellers response to the offer, therefor making it a material fact.  This response is based on our state rules and regulations, but my guess is that in most states all material facts must be disclosed.

No more blurry line . . .  :)

In AZ, Lombardo vs. Albu 2000 addressed the issue of disclosure vs confidentiality.

http://www.mcrazlaw.com/article.php?ArticleID=26

In that case, the disclosure was withheld that the buyers could not perform because of financial difficulties.

In this case, the buyers would not perform but it still affects the seller's ability to make an informed decision. The agent knew and deliberately withheld like Dennis said, a material fact.

This is a VERY interesting issue.

Gail & Candace... Very important stuff. (and embarrasing). I have been doing this a long time and have gotten this wrong more than once.

I never did like the feel of it but thought confidentiallity trumped disclosure in cases of this type.

Thanks

Sorry Candice !!! Not my day, or week, or month.

Gail, I don't think that will help him as far as covering his butt. The disclosure needs to be made to accompany the purchase contract. But it's good for you that he tried. He cannot say he didn't know.

It's okay, Corie! We are all so conditioned to 'confidentiality forever' when it comes to our clients. And just like you said, it 'feels off'. That's why that case was so landmark.

Client with multi offers who can't qualify. What a prize! LOL

Gail it is late and has been a long week, but it sounds like you opened escrow before you got lender approval?  

With a short sale you now have two sellers, the owner of the property and the lender.  Without the lender's approval you do not have a deal, as they have the last say.  And from what I am finding that last say has been "not sufficient" more often then not!  We have been covering everyone by putting in the offer, that all contingencies and the deposit are to start with lender approval.  Our seller does not sign the offer until the lender has approved that offer.  (Don't forget the PAA form and short sale addendum).  Plus you do not want to take this property off the market until you have lender approval also.  You really do not have a deal without it.  You do want to order and Prelim, to make sure there are no surprises, and ask escrow to order payoffs (if any) and do the most precise HUD as possible (as they will hold you to what you summit with the offers).  Good luck with the Short Sale.  If you need anything feel free to email me.

Jana

Gail get your workout reps email address.  Unless you catch them picking up the phone they will not call you back in any timely manner.  Not sure they even listen to their phone messages.  Do everything by email.  Fax the offers, etc. to their email.  Make sure you put the loan number on all pages.  And just be ready to wait.  Hint they don't seem to want to deal until it gets close to the auction date.  They are losing thousands of dollars by this policy, but that seems to be the norm.  Don't spend a lot of money on this property.  

Jana

Gail, here is the rub. The NAR and your local board have NO RULES on how to post or list a "short" sale. You might as well take a $500,000 home and advertise it as a $200,000 list price with the phrase "subject to third party approval" in the remarks. The bank is not going to accept it and the agent who posts the listing (9 times out of 10) never even called the bank to see what they would accept. It's a crap shoot. But, I'm sure someone will pull out the "code" book and show me where it is all on the up and up. Why don't the people like us?

[Greg sez: Why don't the people like us?]

They hate us because we're beautiful!   LOL

Our MLS is debating whether to prohibit short sale listings completely.

Well, I can see by your picture that you are indeed. Me? The reason I use the lighthouse. Anyway, "I like me and so should you. I'm a nice fellow and I deserve to be happy." - from the Saturday Night Live

http://youtube.com/watch?v=3xqKkLlCfLE

Personally, I haven't dealt with any short-sales yet. But sounds to me that they are even more hassle than foreclosures?

Gail, I am not saying to prohibit Short Sale listings. I just want some standards. An agent can post any listing as a "Short Sale" and have never even spoken with the bank about the home owners hardship circumstance. No appraisal. Not even a telephone call or bank letter in file - just list it at whatever amount will draw attention to the home. And, then they place in the comment section "subject to third party approval". It is wrong and in my opinion UNETHICAL to lure in a potential buyer with listings posted at a dollar value that the bank won't approve. In most cases the bank won't even acknowledge there is a hardship - just an owner who wants out of their contactual agreement.