Short Sales and Presentation of Offers
QUESTION: I have a short sale listing under contract. The contract has been sent to the seller’s lender. I have just received a back-up offer from an agent working with a different buyer. My seller isn’t interested in accepting a back-up contract. Do I have to submit the second offer to the seller? Do I have any obligation to let the lender know about it?
ANSWER: “Yes” to the first question “It depends” to the second question.
Regarding the first question, Real Estate Commission rule 58A.0106 requires agents to deliver “immediately and in no event later than five days from the date of execution…copies of any required written agency agreement, contract, offer, lease, or option affecting real property.” This is true whether or not your client has indicated that they do not want to consider other offers.
The answer to your second question depends on who sent the contract to the short sale lender for its consideration. The Real Estate Commission has taken the position that the existence of the second offer is a material fact that must be disclosed to the lender, so if you as a listing agent were involved in presenting the contract to the lender, our answer would be yes, you must make the lender aware of the second offer. On the other hand, if the seller hired a lawyer to present and negotiate the contract with the lender, you would not be expected to make the lender aware of the second offer.
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