Exlusive right to buy on a shortsale?

Question

Hey guys,

Hope your days are going well.

Is there a  form or addendum that gives you the specific right to buy a shortsale exclusively when putting in a cash offer to the bank? (if the bank accepts the offer of course)

The objective here would be to avoid the bidding war from numerous buyers submitting their highest and best offers and eliminating competition by you being the only offer to the bank.

I am dealing with an unlisted property and getting ready to submit the offer via a broker.

Thanks in advance for your input.

Maryann L. · Answer

Louis, your contract is with the seller, NOT the lender.   There can ONLY be ONE executed purchase contract on a property at a time.  If a Realtor tries to submit multiple offers to the lender they are opening themselves up to LOADS of liability.  Any other offer that comes in after the executed offer is treated as a BACK UP offer.  If the first offer falls through, then the Realtor can move on to a back up offer.

William D. · Answer

You have zero chance of sliding in an exclusive right to buy agreement from the bank in the context of a short sale purchase and sales agreement. Don't even waste your time trying to draft one or pay someone to draft one.

First, the contract is between the buyer (you) and the seller (homeowner). The contract is subject to the lender releasing their lien for less than is owed. This is the short payoff; thus the short sale. The bank is not an actual party to the contract so the buyer cant obligate the bank on exclusively dealing with one seller.

Secondly, from the bank's point of view, they are forced to take a loss on an asset and have an obligation to accept the highest offer for their investors and mortgage insurers (assuming one exists). It makes no sense to obligate yourself to negotiate with only one party. What are they getting in return for your exclusive right to buy agreement?

Rusty Thompson · Answer

Good Luck with that. What is your experience with short sales?

From the experience I gained from buying one. Your offer is more like a request. The home owner accepts your offer, then the agent submits it to the bank. By that time it comes back, your offer has usually expired. If the bank then accepts your offer, the agent will come back to you & see if you are still interested in buying it. It took 3 months to get my offer back & then they only gave me 28 days to close. Its a very confusing process.

Judging from your situation. If its a national bank, I would expect it to take longer. The bank will need to assign it to a negotiator, then it needs to get to the top of their list, then they will need to order a BPO, the seller will need to correctly submit a bunch of paper work... All of this needs to happen in the correct order to move along quickly. Then for them to then accept you offer, it will then have to come in at, or above the BPO.

I would say that your best best is to offer a large EM with your offer. Also stress to the agent that you will close on the loan & your not a flake. The large EM will help with this. In my area the agents typically don't submit any other offers once the seller accepts one. It really simplifies the process & helps thing move along at a rational pace.

Hope this helps. Like I've said I only have one under my belt, so others millage may very. Again the point I'm trying to make is you will probably hurt your chances by trying to include your addendum & in reality, considering how the whole process tends to run out, will have no actual power.