BiggerPockets

Hey all-
My husband and I are currently trying to buy our first home in Southern California. We found a short sale and put in an offer at asking price. The sellers accepted our offer. I'm assuming the offer is now on its way to a negotiator or bank (hopefully). The thing is that the seller's agent is now asking for a deposit. He claims that if we give the deposit he will list the property as pending. He says that even though the sellers have accepted our offer, if another offer comes in he must submit it to the bank also. I guess he will list the property as pending on the MLS to detour others? Our agent was not too sure about this which makes me nervous. My questions are: Is this something that occurs often? Also, even though the sellers have accepted our offer, they can accept another offer to be submitted to the bank after ours?
Any insight or advice would be very helpful. Thanks

I agree 100% with Jon's advice.

Additionally, I assert that one should always make offers with a clause stating that the EMD will be deposited into escrow within a certain period of time after having received a copy of the fully executed P&S. Keep in mind that the EMD is a form of consideration, and there can be none without the fully executed agreement.

A realtor I work with doesn't take actual deposit checks for short sale offers or any offers, just a copy of a check or POF. The exception recently was a HUD bidding process where a certified check was required.

Alisha what everyone suggested is right on. To answer your question if this happens often the answer is oh yeah. Short Sale listing agents in our area (Inland Empire) are trying to get bidding wars and they absolutely can because there's a shortage of REOs on the market. That's why we like dealing with the homeowner directly and getting the property under contract or working with agents who let us put the property under contract and then we'll do all the negotiation.

Like Tony asked, are you specifically attached to this house? If not, what area are you looking to buy? Besides short sales, we also have a couple of direct lines on REOs which are great for end buyers. Most do not have enough spread for us.

Moe

If a Notice of Default has been filed, NO DEPOSIT IS REQUIRED or DEPOSIT NEEDS to RETURN TO BUYER IMMEDIATELY.

The realtor is trying to tide up your money and string you alone.

I have purchased 20 shortsale properties since 2007, NO DEPOSIT has "I given" to the Seller / Listing Agent / Escrow before short-sale approval. DEPOSIT is REQUIRED to "effect legal consideration of the buyer" only when the Short-sale IS APPROVED by the BANK and PAY-OFF DEMAND IS ISSUED.

If in a case of Short-sale Offers, agent is ONLY required to submit one offer that is ACCEPTED and SIGNED by the BORROWER and "NOT" one that has the HIGHEST SHORT-SALE OFFERING PRICE and "NOT" AFTER your contract acceptance.

Bank will accept a lower price. Reason: it is due to the fact that higher price always has a higher probaility of cancellation than one that has a lower price.

Sincerely,





Felix Liusky, former Bank Vice President
Wellsfargo, Bank of America, citibank and Summit National Bank Corp.

My disclosure states the homeowner must request the Realtor put the property contingent. If the homeowner signs my disclosures, that dictates what their Realtor should do.

I thought all offers led way to a Realtor putting an offer contingent. http://seattlebubble.com/blog/2009/05/31/nwmls-mark-any-accepted-offer-on-a-short-sale-as-pending/

I think unless the homeowner asks for backup offers the listing SHOULD go contingent. Where we live though the homes that are short sales go contingent with a line in MLS that states "Backup offers are being accepted", but the listing does go contingent.

Hi All,

I am a realtor and in our contracts the short sale is a contingency for the seller. When that contingency is in place, it means the contract is contingent upon the seller being granted the short sale.. and the terms that comes with it.

The realtor is actually not supposed to collect earnest money until the short sale is approved. It is correct that even if you had deposited the earnest money, it would go into an escrow or trust account and refunded to you at any time before the short sale was approved, or after if you inserted a contingency as the buyer due to financing or inspections ect.

In addition, any time an offer is signed by the seller and the buyer (considered a mutually accepted offer) the listing agent is required to change the property to pending. They can put pending back up requested should the bank want multiple offers. Any agent that has a mutually agreed upon offer and keeps the property listed as active is probably in violation of the local multiple listing service rules... so if they told you they needed the deposit to change it from active to pending then I would run.. and run quickly because this agent does not know what they are doing!