Submitting Multiple Contracts to the Mortgage Lender – For Massachusetts or NH Short Sales (or not submitting at all!!)
Ugg…I hear all sorts of things that some agents do, but in the past week, I had TWO agents calling wanting to work with us, and unfortunately, we couldn’t come to an agreement on certain procedures. Once we close a sale with a new agent, so long as everything went smoothly, we will start to refer listings to that agent. We give out a lot of listings to agents we’ve worked with before.
Last week we had a short sale homeowner that needed a listing agent in a new territory for us. We posted about the listing at a local real estate association and the calls came flooding in. I usually only will give a listing to an agent who has referred an agent to us first, but this territory was further out, so we didn’t have someone who would service it effectively.
I got a call from an agent who identified himself as “an expert” and his brokerage was an EXPERT at short sales and REO’s. Instead of asking me about my needs with the listing, he went on about how he had an INVENTIVE way of taking multiple offers to keep submitting to the bank until they got approval. I couldn’t believe what I was hearing. I tried to stop him several times to say, “we don’t work that way,” but it fell on deaf ears as he kept telling me how they rigged one buyer against another. I finally had to put a stop to the conversation. I suggested he call the lawyer for the NH Board of Realtors and ask them if what they were doing would cause tortuous interference of the first buyer’s contract. He seemed a bit shocked that I didn’t think his method was the best thing since sliced bread. I told him I would never risk being sued by the homeowner NOR the first buyer by submitting a higher offer if it came in the second position if my first position contract had not been denied. I tried to explain it in simple terms…what if your submission of the second contract reset the paperwork trail for the lender, and the homeowner was up against an auction…Now the homeowner could sue me, and the agents involved for the interference of the first contract. OR even better, what if the first buyer got wind of the second contract and sued the homeowner and me, AND the agents for interference? NO THANK YOU. I’ll submit contracts the good old fashion LEGAL way, one at a time. If one gets denied, I’ll move onto the backup, but I won’t be submitting more than one contract at a time.
The second phone call I got was from a Massachusetts agent who told me he doesn’t even submit purchase contracts to the lender but can get an approval. WHAT?!?!? After digging a bit further, I discovered he only submitted the “offer to purchase” – His reasoning was, why should we involve the lawyers up front. I almost fell off my chair. I work VERY closely with my law firm (Flavia Benson at Gilmartin, Magence, and Ross –sorry shameless plug). The reason is the liability in short sale mitigation is sky high and I’d rather cross my t’s and dot my I’s, but here is the BIGGEST REASON I would NEVER submit just the offer to purchase – It’s too easy for the buyer to walk. I’m not saying the offer is not binding, but most financed buyers need to get a commitment BEFORE the approval of the sale. Anyone waiting until approval risks not closing in time. You won’t get financing without your purchase contract COMPLETED. You don’t want to wait until approval to start negotiating the terms of the purchase contract and RISK two lawyers may not agree!!!! ANYTHING you can possibly do upfront including inspections, appraisals, mortgage commitments, purchase contracts, etc, should be done so that all you have to do once the approval comes in its scheduled closing. I could tell this agent’s closing rate was likely in the hole for his short sales.
Needless to say, we couldn’t work with either of these two agents because we didn’t see eye to eye on the short sale process at all.
For Realtors, Attorneys, Title companies, etc interested in our services please go to http://massachusettslossmitigation.com/
For homeowners needing assistance with avoiding foreclosure please go to http://shortsalemitigation.net/
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Tewksbury, MA 01876