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Two Methods in Making an Offer to Purchase
Method A - Typical Short Sale Process
- We receive one or more offers, present to seller and choose Highest and Best (H&B) for submission to bank. We only submit one offer to the bank for review.
- All competitive offers including H&B are sent a Multiple Counter offer.
- No earnest money is required at this point.
- The property remains active and all offers are presented to seller.
- Once we get assigned a negotiator and a BPO is conducted we will go back to all buyers to see who is remaining and 1.)Who is still seriously interested in the property and 2.) ask for H&B offer.
- The final accepted H&B offer is presented to the lender for review/approval.
- The property will be moved to AWC-I status. Should the H&B offer withdraw we will go to the next buyer with the H&B offer to negotiate and submit offer to lender for review/approval.
- We wait for the Agreement Notice from the bank and once we receive and seller agrees to terms we move property to pending status and move to the more traditional escrow.
Some people ask why we select the H&B once we have a negotiator assigned and BPO completed. As the seller's representation we understand that the seller incurs losses and tax liabilities on forgiven debt. It is our DUTY to minimize these losses at every opportunity to the best of our ability. In addition, buyers are making multiple offers on properties and most times the initial buyer is not even around once we get assigned a negotiator. With foreclosure looming this can be a financial disaster for the seller. At this stage all serious buyers can actually submit their offer on an even playing field and have a good short at procuring the property.
Method B - For those buyers who "Just Have To Have It" and Bank of America/Countrywide loans
- We receive and negotiate an acceptable offer between buyer and seller.
- Buyer deposits earnest money at Title Company. Earnest money is non-refundable until Agreement Notice or 120 days, whichever is sooner.
- The property is moved to AWC-I status and all offers are held as back-ups and not presented to the lender unless the current buyer withdraws.
- Once we receive the Agreement Notice from the bank and seller agrees then property is moved to Pending status and we move to a more traditional escrow. Earnest money is refundable per contract terms from this point forward.
If the bank disapproves the short sale or does not approve the terms buyer and seller agreed upon then earnest money is refundable to buyer immediately.
Due to B of A/Countrywide short sale process, it is preferable to deal with one buyer only. B of A/Countrywide has a history of having to submit an entire new file if buyer changes midcourse. Essentially, it is like starting from scratch.
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