the dawn difference

head_left_image

Can an Owner Reject an Offer in a Short Sale?

Buyers and agents, take note: you will NOT be getting an offer signed by the bank in a short sale. The contract is between the buyer and the seller. The bank is not a party to the contract.

This is a great post explaining why a seller CAN and often does REJECT A LOW OFFER on a short sale.

Contrary to what some may think, an owner is not obligated to submit every offer to the lender for approval in order to do a short sale. As a matter of fact, there are offers that an owner should never submit to the lender. That is the owner’s right, as they still hold title and ownership of the property, and the bank’s decision in a short payoff is simply the amount they’ll take to release the lien and settle the debt.

In Westchester and the surrounding areas of New York, offers are not submitted to the lender for approval, contracts of sale are. And those contracts are between buyer and seller, not the bank. The contracts are conditioned upon bank approval, but they are binding contracts none the less. And it can take every bit of 3-6 months for the lender to render a decision, all while the foreclosure wheel turns. If the owner goes to contract with an offer that is less than a realistic expectation of value, they can be six months closer to foreclosure when the bank issues their denial of the short sale.

Sellers are therefore looking for realistic offers, not for their own pockets, but to ensure the bank accepts the short payoff. If an offer can be judged favorably by3 recent (i.e., 6 months or less) closed and 3 active comparables, the offer bodes well. Buyers who submit speculatively low offers, unsupported by 3 sold and 3 active,  are doing something ill advised; if their amount is not close to what comparable sales for similar properties are getting on the market, they could waste months waiting for the inevitable “no.” And that “no” could cost the owners their house.

We have a enough offers in multiple bid situations meeting resistance to the banks; lowball offers invite peril to the seller and frustration to the buyer. And it is ultimately the sellers decision as to whom they’ll go to contract with. A short sale sellers surrenders proceeds. But no owner surrenders their rights. While the bank makes the final decision on amount, it is the owner, on advice and market data from their agent, who determine what to submit to the bank for that decision.

 

Originally posted on the New York Short Sale Blog

Feed your mind.

  • We Are Westchester County & Hudson Valley NY Real Estate. Reach Phil at (914) 723-8900.
  • J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. Vice President, Empire Access Multiple Listing Service. 
  • I am one of New York's premier short sale REALTORS, serving Westchester & the Hudson Valley. 
  • J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
  • Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
  • I am hiring agents. We offer outstanding support, marketing resources, and pasta. 

J Philip Real Estate
All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

Dawn Maloney, REALTOR®,  Luxury Home Marketing  RE/MAX Haven Realty

Direct:  (330) 990-4236         Email: dawn@dawnsold.com

Helping home buyers and sellers in Summit, Portage, Stark, Medina, Wayne, Lake, Geauga and Cuyahoga Counties since 2003.

All content ©2006-2014 by Dawn Maloney, REALTOR® unless otherwise noted.

 

 

Comment balloon 3 commentsDawn Maloney • October 29 2010 08:34PM
Can an Owner Reject an Offer in a Short Sale?
share
Buyers and agents, take note: you will NOT be getting an offer signed by the bank in a short sale. The contract is between the buyer and the seller. The bank is not a party to the contract. This is a great post explaining why a seller CAN and… more
Thinking of Selling your Home in the Spring? Get started NOW!
share
This post by Kathleen Emhof is great for those of you who truly plan ahead! I like her guidelines for getting the house ready to sell, especially, "If it has eyes or words, it must go! " FYI… If you need suggestions for where to get… more
PROTECT OUR HOME PURCHASE AND PROTECT YOUR REAL ESTATE INVESTMENT
share
If you want to know some of the juicy secrets about real estate… dig in to this post by Lenn Harley. One of the best items here for buyers: Only a buyer's agent can help you negotiate the best possible price, terms and conditions for a home you… more
Don't Kill Alligators - Drain The Swamp!
share
Don't Kill Alligators - Drain The Swamp! Here is a problem solving strategy that gets the most bang for your buck - prevention of problems vs. solving problems. Don't wear yourself out with a constant battle with each problem that arises. Take… more
FORECLOSURE DENIED! THE DEFENDANT DIDN'T RECEIVE THE MIRANDA WARNING!
share
"If you're thinking "they bought homes they couldn't afford", just leave the building. " But if you really want to get a better insight on why this is happening… read on. Yesterday I was infuriated at the media reports that… more