Myth: In a short sale, the offer submitted to the lender is the one that will get the home.
False: Just because a buyer submitted an offer on a short sale and waited for the bank approval does not mean that they automatically get the home. As difficult as it may be to hear, a listing agent has an obligation to the seller to get the most money for their home to reduce the amount of debt owed to the the lender. A buyer who submits an offer and it is accepted by the seller, may be bumped if the property recieves a higher offer at a later date.
Last week I listened to two real estate attorneys Dave Hammerslough and Shannon Jones, and they both spoke that agents must submit higher offers to lenders, even after a seller accepted offer. If not then agents are at risk of compromising their fiduciary duty to their client to eliminate the most possible debt. Also agents are required to have verbiage on the MLS stating that it is subject to lender’s approval.
This news may be frustrating to buyers, as they may be waiting to purchase a home that later they are bumped from first position. It is important that they offer the highest and best offer from the beginning because they only will pay up to that point and it keeps emotions at ease.