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Did You Write That Contract?

VOIDSince I have a few short sale listings in the lower  low, lowest price range for the area of the city they are in, I receive quite a few calls and emails about the properties. Recently, I have started receiving offers on these homes as well.

I like receiving offers on my listings! Actually, it ranks up there as “one of my favorites” about my business. Lately though, I’ve been receiving offers on these lower end properties where it appears the client wrote the offer and the agent just forwarded it.

I’m not new to this game and know many investors like to operate in this manner. Is is right? Is it ethical? I’m not going to answer these questions, everyone has a different opinion. Let’s just say, I don’t personally write offers on homes I haven’t seen.

If you are going to allow your investors to write the offers, I have a few suggestions:

  • Make sure it is the most current contract available – or plan on sending me a new offer
  • Please send the short sale addendum as requested
  • Have your clients sign the correct page of the contract
  • Send me the signed contract on the correct property
  • Give my clients enough time to respond
  • Educate yourself and your client about short sales

I understand investors like to throw contracts at the wall and see what sticks, but this is my seller’s time. The short sale process is not going to change just because your client has cash. I owe it to my seller to submit a valid contract and when any of the details are missing (especially a signature) or the correct address, I just can’t submit your offer.

If your client wants to see what sticks, send me a valid offer. I look forward to working with you and closing the transaction for both of our clients.

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Written By

Paula is team leader for The "Home to Indy" Team in Indianapolis . She is passionate about education and client care and believes an empowered client is better prepared to make good decisions for themselves. You'll find her online at Agent Genius,Twitter and sharing her insights about her local real estate market at Home To Indy.



  1. Lani Rosales

    June 11, 2009 at 4:48 pm

    @IndyAgent- is it really this bad in the world of short sales that these agents can’t acquire a signature?!?! WOW!

  2. Danilo Bogdanovic

    June 11, 2009 at 5:14 pm

    My response to contracts like that is, “Your offer is not complete nor valid. Once I receive a complete and valid offer, I will present it to the seller.” They can go throw that crap against someone else’s wall.

  3. Derec Shuler

    June 11, 2009 at 5:32 pm

    I received one of these on a short sale a couple weeks ago and the cash investor wasn’t working with an agent. The offer wouldn’t have passed a file audit at my company which would have put me in hot water. However, though on an outdated contract and written by hand and incomplete, it did meet all the legal requirements for a contract and I presented it to my client with the comment that they could accept and I’d clean up the contract later.

    We ended up countering on an entire new contract, which I wrote and presented to the potential buyer along with all the addenda. Some time you just have to suck it up and go the extra mile though I definitely wouldn’t have been as cooperative if it had gone through another agent!

  4. Paula Henry

    June 11, 2009 at 7:54 pm

    Lani – I think they just submit what the investor sends them. It can get pretty scary.

  5. Paula Henry

    June 11, 2009 at 8:08 pm

    Danilo – Love your philosophy! Agents need to make sure the contract is at least signed. One I received last week had the buyer’s signature dated in April for a different property. It just won’t fly.

    Derec – I’m with you – I have had investors send me their contract and like you, I told them I would need to write it on our standard contract and negotiate it with the seller. I don’t mind doing so. Recently, though I keep receiving the same contracts from the same investor and when I ask for a short sale addendum, I never hear back. I have others who we go through the process of obtaining bank approval, then they walk away, because they have never seen the home.

    I prefer they at least have their agent see the home first and I do have agents who have done so.

  6. Missy Caulk

    June 11, 2009 at 8:53 pm

    hummmm….be careful of scams. How can an inverstor write a contract on board approved doc’s?
    That is scary.

  7. Paula Henry

    June 11, 2009 at 9:09 pm

    Missy – I don’t know, but they do. Scarier is that agents submit them. I have had investors send me their contracts and I tell them I must use the board approved forms.

  8. Barry Cunningham

    June 12, 2009 at 12:13 am

    This post gets the big HUH??? from me. In some of these comments, it is clear why so many short sales don’t successfully close.

    I would expect a much higher game from agents of this caliber. Sooner or later the “agentry” will realize that they may control the ignorant Seller, but they don’t control the market.

    One of the reasons that so many agents don’t hear back from prospective buyers, can be found by simply reading this post and its comments.

    When i buy property, I demand it’s on my contract (yes I use board contracts a lot of the time)…I use my closing agent, I handle short sale negotiations and I’ll let the agent know when they will get their commission wired to them

    If somebody balks…gives me any gruff..they’re done! Too many deals out there to deal with BS.

    Oh by the way…I have stated it MANY times here and elsewhere..I NEVER go to a house and see it before I buy it..ABSOLUTELY NEVER.

    Trust me I can tell a deal by the numbers and my due diligence from my computer and my inspector handles the review of the property very thoroughly.

    Here’s a hint..most savvy investors don’t have to see a property before they pull the trigger on an offer. And I’m not even talking the one sin my backyard.

    Most of us are able to get a decent numbe ron any property in the Country and as long as their is a right of inspection (mandatory) then why would I ever leave my cushy oceanview, airconditioning office?

    C’mon will be 2010 soon. This thread is so 1980’s it’s not even funny! What are you going to say next, I need to put down 20%…yeah ok! Get real.

  9. Russell Shaw

    June 12, 2009 at 2:59 am

    In our state – and I believe it is true in most states – all offers must be presented, but all contracts must be in writing.

    It makes no difference if the buyer has seen the property. Anyone is free to send in (or call in verbally, for that matter) any offer on any property, in any manner they like. Now, how we present that offer to our seller is going to match the “quality of the offer”. Verbal offer = verbal presentation. Not on the standard contract, then that will be part of the counter. Shotgun low offer, then presented verbally with a strong recommendation to simply decline.

    In short, we represent our seller and do what is in their best interests. I am not interested in nor do I care about, “this is how the buyer wants it” unless that is what is best for our seller.

  10. Paula Henry

    June 12, 2009 at 7:03 am

    Barry – I’m talking about agents submitting an offer on an outdated mandatory form. There are reasons the form has changed, which benefits both the buyer and the seller.

    I require the short sale addendum, because it offers specific information about the short sale process and dates for the lending institution to reply, seperate from the contract, which states the date the seller must reply.

    I do present offers to my seller, but if you want a chance to have the offer looked at by the bank – then the package must be complete with all signatures.

    I beleive they even required signatures in 1980.

  11. Paula Henry

    June 12, 2009 at 7:16 am

    Russell – I do present all offers to my seller, however incomplete, but I can not submit it to the bank without the required documents and signatures.

    One bank told me the contract was void becasue the date had expired. then I directed her to the Short Sale Addendum, which provides the date the lender has to respond.

    My goal is to represent my sellers best interest and when all signature and documentation are correct, we have a much better chance of closing.

    I also don’t care if the buyer has seen the property; I just personally don’t write offers on properties I haven’t seen – I know what some of these homes look like:)

  12. Danilo Bogdanovic

    June 12, 2009 at 7:49 am

    Paula made a very good point about offers and banks – for a bank to consider an offer (whether a short-sale or REO), it must be in writing and it must use all of the proper forms for the jurisdiction the property is located in.

  13. Barry Cunningham

    June 12, 2009 at 8:14 am

    Paula I don’t know who it is you deal with and perhaps they don’t have a clue. So perhaps it’s a matter of bad judgment on their part. All of our offers are on board contracts, are signed, and contain OUR addendum which was prepared by our attorney which covers what needs to be addressed in a short sale.

    About 6 months ago, I had a tussle on AR wherein I said I had a 100% success rate with short sales, and everyone got into attack position in disbelief. Well it’s not 100% anymore…we lost one, so I guess we’re at 99.9%. The reason being that we know how to present the deal to a bank and how to negotiate with a bank.

    You are right there are some (many) agents without a clue. I HATE using superlatives and when I see comments like that which some here used like “for a bank to consider an offer (whether a short-sale or REO), it must be in writing and it must use all of the proper forms for the jurisdiction the property is located in” which is simply not true, or when I see things like ” I understand investors like to throw contracts at the wall and see what sticks”…it’s that kind of BS that makes my face turn red!

    My time, is quite valuable. When i see what most realtors make, I can conclusively say my time is MUCH more valuable than theirs. I don’t waste time simply throwing out offers to see what sticks. I’ll leave that for the infomercial crowd.

    When We place offers, with funding documentation attached, the banks take notice. It’s the mentality as shown herein that precludes a lot of deals from getting done.

    I’m so sick of agents posturing about looking out for the best interests of their client in a short sale transaction. It’s ludicrious. Most haven’t a clue of the foreclosure process, how it evolves, the timing of it and more Sellers end up losing their homes than selling because an incompetent agent thought they were looking out for their seller’s best interest.

    Go through your local MLS and see for yourself. See how many short sales have been listed in the last 6 months, find out how many actually closed and then see how many were lost to the process. It’s simply amazing and what I read on so many agent websites is how the bank took too long orthe buyers walked or this and that….

    The bottom line is “Real estate agents listen up, say goodbye to the term “low ball offer”. Hear me now- an offer is an offer. I don’t care if it is thirty percent under the asking price. An offer is an offer. By using the term low ball offer, we are setting ourselves and our clients up for the fact that it is not a real offer.

    Deals are not happening because agents are afraid to write offers. Deals are not happening because agents are afraid to present offers. The job of a real estate agent is to make deals happen, not prevent them.”

  14. Doug Francis

    June 12, 2009 at 9:16 am

    I have had excellent buyer clients write contracts on short sales. Professional, clean with all pages signed or initialed. Dream paperwork with pre-approvals from familiar, local banks, and decent deposit checks. You know, like they taught us back in real estate 101.

    But then to have little response, long waits, and a listing agent who I know is praying for this to work out too. And often it is an excellent, professional listing agent too who works hard to make an income… but they are left in limbo to make excuses for the slow response.

    I’m sorry to say this but I believe it needs to be said, the use of short-sales in “pending” statistics (local and national) creates a false impression of a real estate rebound. These short-sales are so unpredictable that I can understand why investors think so poorly of them.

  15. Missy Caulk

    June 12, 2009 at 8:11 pm

    Barry, I have listed and sold many short sale homes. But, I have to tell you every document that bank has said they need and want is presented in a one package deal.

    How are you getting banks to verbally talk to you etc…?

    I would really like to know as the more I have learned over the years the more precise my contracts are with a label on EACH page with sellers names (yep the middle initial too) loan number and addresss.

  16. Barry Cunningham

    June 12, 2009 at 9:05 pm

    About 5 years ago we started doing short sales (way before they became cool)…it was tough back then to short sale a property with equity but once we broke through it became easier and easier. Now fast forward to today and it’s a very easy streamlined process.

    We have a very well defined process and I am not pitching our course right now but telling you very succintly that we NEVER deviate from our course of action.

    In short, we identify a prospective deal (not hard at all) but finding an agent who has a clue makes it hard.

    When we see an unlisted property it’s simply money in the bank..slam dunk..homerun…cash in hand. We spend thousands of dollars per month marketing to unlisted and soon to be expireds…and that’s the bread and butter.

    The gravy is sifting through the wreckage on the MLS. The sweet spot, which we have taught thousands of agents…is to look for the deals where the homeowner has little or no options left. Why? Because this means the bank has little or no options left. We find agents who have sucked at the process, and we send them our offer with the publication of their homeowners sale date.

    You’d be amazed how many agents have no clue that their listing is about to be auctioned off in the next coulple of days or weeks. We submit the contract, through our agent who makes sure that all of the terms and conditions that we want is in place.

    Once accepted we take over, send to our attorney who is retained by us for the benefit of the homeowner (totally legal) who then fires off a letter of appearance on behalf of the homeowner along with a few timely motions and voila…auction is stoped and then we wait….We fire off the LOA…and wait….

    WE NEVER CONTACT THE BANK…they ALWAYS contact us. When they do we tell them we are finalizing ano offer and we’ll get back to them…and we make them wait until WE are ready to negotiate.

    We assemble our ENTIRE package, then send in the package (which trust me is more complete then you could imagine…most times is in excess of 200 pages) and when we submit, we request a bpo. Even if they have had one, we demand a new bPO…which they always grant and it’s not until after the BPO do we engage.

    There’s a lot of behind the scenes maneuvering that goes on that I don’t openly want to mention…but that’s the synopsis of what we do.

    The biggest thing that’s a bonanza to our business, which is kind of on the qt…is when we close we already know who our negotiator was. So we scour the public records for defaults with the same lender in the same area. When we close we ask if they are representing the “Jones” file on 123 Smith St. We tell them we may be interested in that deal.

    Although they shouldn’t tell us…they aleays do. So now we have the ear and contact of that negotiator and we know what they handle.

    So on our subsequent deals, they already know who we are and becasue of our style and ability (plus a VERY defined email campaign…yes we get the email) they call us and ask us what we’re working on and let us know deals they are having problems with.

    Then we call the agent and pretend we don’t know anything when we’ve already talked to the bank, and reviewed the entire court file…it’s a breeze.

    Most banks we deal with give us approvals on the phone within the second or third call now BEFORE we even present a package. I call that sweet!

    You see..we developed a system because we knew this was so profitable. Most agents have no clue about what I just wrote above and would never do it if they were told. But in a nutshell…that’s our business model.

    Easy to tell..extrmely hard to duplicate and we cherry pick the deals we want now while most agents run around trying to get the listings of houses that have no business being listed at prices they have no business being listed at all the while operating under the guise of protecting their client’s best interest.

    Give me a break…they have no clue that we all are in the liquidation business. Hopefully by your inquiry you do know this. Love to share with you…

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