short sale flipping-I represent buyer

[Diane B.]

I am a new agent in New York and submitted an offer on a short sale on behalf of my client on a listing that was originally listed with an agent. I was then contacted by that agent and was told that she was withdrawing her listing and a "short sale negotiator" was stepping in. This short sale negotiator is an investor who tells me that she is is negotiating with the seller's lender and if accepted, the property will transfer to her and she will then transfer it to my client. I asked her if the bank was aware of the amount of my client's offer and her reply was "the bank is aware that she is an investor and her contract clearly states that she has control over the property and will sell the property for a profit" and that my client's offer is to her - not the lender - and my commission will be paid by her.

Should I be concerned about anything here? I will disclose this to my client and let them make a decision but my broker is not comfortable with me doing the deal. I don't want to walk away if not necessary.

Any suggestions?

[Bill Patterson]

Diane,
Don't give up entirely on this process. Sam & Eric are correct that when done in the proper sequence and full disclosure, this type of transaction with an investor buying and selling the short sale can be of benefit to all parties involved including the lender and the end buyer.

They are also correct....this one smells a little fishy and you are wise to be concerned. Sorry Sam, you've got Bill instead of Jackie....., but there may still be a way for your buyer to get their home, Diane! As a broker, my advice would be to talk to the agent or have your broker talk to her broker. If indeed your offer went to the listing agent before the investor stepped in, they may be interested in the CT case. They may also be interested in dropping the deal with this "investor" and just going with your client's offer. If you do decide to do this, I would have your client's offer accepted and make sure that it is the only offer submitted to the lender. There is no more reason to have the seller accept and submit another offer when your client has a valid contract than if they had a valid contract on a non-short sale property and wanted to accept a higher offer that came in. You have a contract that should be negotiated until the lender or your client cannot come to a meeting of the minds. Short sale negotiation is a specialized field! Is there someone in your office that is experienced and has a good track record of successful outcomes and no or low deficiency judgments?

Good luck,
Bill