I was chasing a short sale property since Jan 2009. Seller listed property for 975K in 2007 and has progressively lowered it until the list price was 349K in Jan 2009 (in the mean time he switched a few agents too). I offered 270K in Jan 2009 and shortly after had a contract but waiting on the bank to act. Bank did a BPO and it came in at 400K so they asked me to up my offer. I up my offer to 320K but went no further. Bank did not approve so I cancelled the contact and seller back to selling. My offer was originally submitted to the listing agent (who worked for the seller) but she was pretty easy to work with. Shortly after my deal fell through, that seller terminated the listing agreement and hired someone else. The house went off the market for about two weeks and then was relisted at 400K. I had email notification setup via Realtor.com and noticed the property being relisted. I was wondering if I should submit an offer to the new listing agent (with same terms) and see if they may be able to get the deal moving, but I decided to wait and see. My thinking is if after 60-90 days no qualified offers than may be I will try my luck again.

In the mean time, a friend of mine who was waiting on a short sale property came through and got loan approval, and he said my problem may be I did not hire an agent who is experienced in short sales and know how to talk to the bank asset manager. He suggested that I hire his agent and use him as a buyer agent to go after this property. So I spoke to this agent and he said with a new listing agent, the whole dynamics may change and he can put together a package that may convince the bank. I said I thought the bank does not act on impulse and not subject to any convincing, but he said this is not totally true. He suggest that I up my offer from 320K to 321K and he would try to make a deal. If no deal, he said he would wait 30 days and do it again. So I was tempted to try it with him, nothing to lose.

And last week, the original listing agent emailed me to tell me they are no longer representing the seller, but the property is now being listed by someone else, but she would be more than happy to submit an offer for me with the same terms and see what happens.

My gut feeling is that if the seller fired this agent, the relationship is probably toxic so it would be a bad idea for them to represent me?

Does my previous dealings with this agent (where I was the buyer but she was the listing agent) post any problem with me using someone else to go in as a buyer agent for the same property now?

The other question is does a change in players (buyer agent, listing agent...) have any effect on the bank's action? In previous posting here I think the advise I got was the bank is going to do what the bank is going to do and it's not going to be affected in any way by the buyer, seller or agents, if that is so then this is a total waste of time?

Yep exactly just sumbit a new offer on the property and see what happens.

Here's my advice...

The biggest change that might make a difference is the listing agent being changed. In a short sale transaction it is crucial for the listing agent to know what they are doing. This can make a difference of whether a bank approves a short sale or not. It is important because there are many things that the listing agent needs to know and do during the process. Many listing agents do not know how to handle a short sale transaction, which negatively affects everyone in it. As far as your offer not being accepted, you can keep trying to submit the same offer but the bank is mainly looking at how close you are to the actual fair market value of the property. Some banks are limited to how much of a percentage less than FMV they are allowed to accept. So if the FMV is around $400k, then maybe the bank's cutoff is 85% of that (which is $340k) in order to approve the sale. Hope this helps.

Also, a problem you might have by changing buyer's agents is that you may put the newest agent in a bind because in most areas if a previous agent shows you a property and starts writing an offer with you on it, then they are due their compensation. If another agent takes over, they may be liable for compensating the previous agent. It sounds like the previous agent not only had procuring cause over this sale, but also had you in contract on this home. Changing buyer's agents most likely will not make a difference on getting the short sale approved anyway, Stick with your original agent and just keep on top of the situation. Be patient.

Like the above poster said having an agent that knows how to do short sales is critical. Unfortunately I would say 99.9% of the agents have no clue. I mainly do REO’s and I am the one many of these banks hire to do the BPO. I talk with asset managers all the time. It’s really amazing the conversations that goes on between the AM and myself. Here is something to think about. The level of understanding of the people doing short sales is so far out of line that Lawyers Title is now refusing to insure the title on short sales. Lawyers Title is by far the largest owner’s title policy insurance company that actual lawyers use then they close the transaction down. Think about that. The majority of the lawyers out there can no longer do the closing now.

That said a couple of things comes to mind. You said the bank has a BPO for $400. Will then let me ask you if you were selling a property and you have evidence that the property is worth $400K then why you would sell it for $320K. Also what you have to understand the value of the property has nothing to do with the note. What you have here is the seller borrowed $975(Assumed by ordinals list price) and he put the property up as colorectal that he would pay it back. What you all are saying is the collateral is no longer worth what was thought so the lender should take less. Well its two separate issues. What the lender here may be doing is not offering a short sale. But are offering to release the security instrument. What they may be saying is we still want our money but to release the lien and turn this into an unsecured note they want more of a payoff.

In its simplest form lets say you lent $100 to someone and they put up a diamond ring as collateral. And now they come back to you as say the diamond ring is only worth $20 now so thats what you owe. What are you going to say. You are going to say no.

Here is something to think about,

The average homeowner might not do that, but a Banker might realize that it could be in their advantage to free up their capital that is tied down in a declining asset and reinvest it somewhere else that has better returns. If the prices are on a decline in your area then you probably have a good chance of getting the bank to look at your offer, but if the prices have stabilized or are on a climb then the bank probably knows that too and would expect to get higher offers.

If I had 320k on hand I would put it in an account in the bank that has control over the property, then I would talk to the investment planning officer at the bank letting him/her know that I was interested in some investment opportunities and I would let him/her go convince the asset manager to make a deal.

I am not a real estate agent or banker.

(not meant as professional or legal advice)

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I guess my confusion is whether my prior relationship with this agent she was really acting as my "buyer agent"?

As I said, she was the listing agent of this property. I approached her and dealt with her directly. I personally prepared all the contracts, hired my own lawyer who handled the escrow etc...she was the seller's agent. On the FARBAR form she and her managing broker did sign on the form. The agent signed as "CORPORATING BROKER" and her managing broker signed as "LISTING BROKER". Does it mean she was acting as my buyer agent and the seller's agent at the same time?

I have no problem using her as my buyer agent, but since she was fired by the seller, and my contract was rejected by the bank and cancelled by me, I think having her in the deal makes it complicated and awkward.

I believe I would have a better chance to have someone else represent me to deal with the new agent. But if I am somehow binded that I guess my options are limited.

Alan I understand what you are saying. However, the trick is no one really knows how much the house is really worth. The market dictates the price. If they think it is worth 400K, then they should have sold it by now. They listed is for 349K in November of 2008, and I submitted my offer of 270K in Jan 2009, and up it to 320K in April 2009. We couldn't make a deal so I cancelled it.

Yes I like the house and don't mind trying it again, under the same terms because I have nothing to lose, they can just say no again. I understand the BOP is determined by comps, but only when someone offers 400K with acceptable terms that's when we know it's truly worth 400K for that buyer.

For me I am looking for a property I can buy at a great price. If it does not work I look for something else, no one knows if this property would be worth 401K tomorrow or 399K. My thinking is a change of agents could make a difference, but I am not holding my breath, I just want to do whatever I can (besides raising the offer price) to maximize my chance, and I am thinking of hiring a fired ex-listing agent to represent me as a buyer agent is not a good starting point, but if I am binded to it, then I may not have any alternative.

For whatever connotation being "fired" may have, Listing Agents most often change because their Listing Agreements simply expire; not because they have been "fired' as in the context where there had been an employer/employee relationship.

As a Contract, every Listing Agreement has a specific beginning and an end (or Expiration Date). The relationship cannot go on endlessly without being periodically, and formally, renewed by the Parties.

I have had many Listing Agreements come to an end, and it is "I" who has chosen not to pursue a renewal of our relationship . . . . not the Seller. This kind of parting of the ways is just that . . . . a parting of the ways, and usually "without prejudice". Not all of us Human Beans work well together . . . . so this is a good thing.

Unless you know for a fact that the previous Listing Agent was discharged prematurely for some unbeknownst reason, I would refrain from repeatedly using this heavily weighted negative term in describing the prior Listing Agent.

Good Luck !

Vermont I understand.

After I canceled my offer, within a week the property was taken off the market. I found out accidentally because I was trying to show some photos of the property to a friend, and I went to Realtor.com where I had the listing bookmarked, and it was no where to be found.

I assumed at the time it was because they found another buyer and the property have gone into pending again. I emailed the agent and basically congratulated her on finding another buyer. She replied that there is no buyer, that the seller has a change of heart and was "unhappy that we could not get an offer close to what the bank asked" and terminated our listing agreement. The term she used was "terminated".

Pathfinder from the banks perspective they have to answer to the investor,investors,and the pools of owners on some loans as to why to accept a low value.

Alot of investors and banks themselves are deciding to "WAIT IT OUT" and that working with the homeowner is much better than a short sale. Owner can refinance to a lower loan amount or they could rent it out and wait for the market to turn in a few years.

It doesn't sound like you have an obligation to the original agent. She had no agency relationship with you, only the seller at that time. Also your offer never got approved and has been relisted with a different broker. I doubt legally a commission could be paid to her now even if she try to claim procuring cause (procuring cause in the sequence of uninterrupted events that lead to the sale). I see no problem though if you do want to use her again. I doubt the short sale banks or seller care. Unless the seller and agent broke it off on really bad terms which they probably didn't. The seller may have got frustrated but in the end they still want to sell so shouldn't have any problem with their past agent
It will be the listing agent that is really controlling many aspects with the short sale in terms of negotiating with the banks since usually that is who will be authorized to talk to the banks about the sellers loan/sale. The buyer's agent usually doesn't have much control but having an experienced one can only help.
I would just use whomever you think will work best for you.