Short Sales: When is Offer ‘Accepted’?

Posted by: najirashid on Wednesday, June 17th, 2009

There has been some confusion about when a short sale offer is “accepted.” A short sale is a sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. The owner will request that the lender (third party) agree to take less and forgive the rest of what is owed on the mortgage. When an offer is submitted on the property the seller who is still legal owner of the property in most cases  must be the first to “accept” the offer. When the seller accepts an offer under these conditions and a contract is formed, the offer is “accepted,” although it will have at least one unresolved contingency: the lender’s approval of the short sale.

If a seller receives more than one offer on the property, the seller picks the best one and signs that offer only and sends it to the lender. I hope this clarifies when an offer is “Accepted.”

Topics: Buyers, Financing, First-Time Home Buyers, General, short sale

One Response to “Short Sales: When is Offer ‘Accepted’?”

Cameron Novak Says:
June 18th, 2009 at 3:27 AM

Thanks for the post Raji. It seems that many people, agents included, believe that the short sale transaction is between the buyer and the lienholder (instead of the seller). While the seller cannot sell without the approval of the lienholder, the listing is posted by the seller, and the seller has the discretion of choosing the offer to accept (initially). Once this becomes common knowledge… short sales will probably be a distant memory.

Cheeers,

Cameron Novak
Real Estate & Short Sale Agent
Corona, California
http://activerain.com/cameronnovak

 

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