CA Association of Realtors presentation on Short Sales and Multiple offers by CA real estate attorney and Realtor John McConnin. this is the slideshow which went with the presentation at the California Association of Realtors Conference in Anaheim California.

1. Multiple offers and Short sales
Presented at CA Assoc of
Realtors Expo in Anaheim CA
McConnin & Company Realty
Attorney and Real Estate Broker
john@favoriterealestate.com
www.UpsideDownRealestate.com

2. 1. Equity Sales (traditional)
 Equity Sales
 A - Simultaneous
 B – Sequential
 Review the contract clauses word by word. A clean read
usually ends the conversation with brokers and lawyers.

3. Simultaneous Offers
Counter Offer No. _________
 3. ……
 4. __ (If checked:) MULTIPLE COUNTER OFFER: Seller is
making a Counter Offer(s) to another prospective buyer(s) on
terms that may or may not be the same as this Counter Offer.
Acceptance of this Counter Offer by Buyer shall not be
binding unless and until is subsequently re-Signed by Seller
in paragraph 7 below and a Copy of the Counter Offer
Signed in paragraph 7 is personally received by Buyer or by
_______________________, who is authorized to receive it
by 5:00 PM on the Third Day After this Counter Offer is made
or, (if checked) by ___ (date), at _______ AM/PM. Prior to
the completion of all these events, Buyer and Seller shall
have no duties or obligations for the purchase or sale of the
property.

4. Sequential Offers
Counter Offer No. _________
 2. RIGHT TO ACCEPT OTHER OFFERS: Seller has the
right to continue the Property for sale or for other transaction,
and to accept any other offer at any time prior to notification
of acceptance, as described in paragraph 3. If this is a seller
Counter Offer, Seller’s acceptance of another offer prior to
Buyer’s acceptance and communication of notification of this
Counter Offer, shall revoke this counter offer.

5. Multiple offers - short sales
 A. Multiple
 B. Sequential
 Buyer
 D. MLS rules vs. Fiduciary duty – read the rules very
carefully
 Consider finding a way to send offers unsigned
 HAFA

6. SSA
 E. OTHER OFFERS. Unless otherwise agreed in writing,
Seller may continue to market the Property despite
acceptance of Buyer’s offer, and to present Short – Sale
lender(s) any additional offers that are received on the
Property.

7. SSA
 B Time Periods: Buyer’s Deposit Check
 1. Time periods in the Agreement for inspections,
contingencies, covenants, and other obligations (i) shall
begin as specified in the Agreement: or (ii) (if checked) _
shall begin the Day After Seller delivers to Buyer written
notice of Short Sale Lenders’ consent.
 However, even if Paragraph B1 (ii) is checked, time periods
for providing pre-approval pre-qualification letters and
verification of down payment and closing costs shall
nonetheless begin as otherwise specified in the agreement.
 What type of contract is this

8. Illusory Contract?
 illusory promise A promise that pledges nothing, because it is
vague or because the promisor can choose whether or not to
honor it. Such promises do not create contracts and are not
legally binding.
 http://www.nolo.com/dictionary/illusory-promise-term.html

9. Contingent Contract
 To agree to do or not do something if something or some
event does or does not occur. (Jm)
 For instance if buyer sells home.
 For instance if you made a contract which states that if seller
receives a short sale approval from lender by the end of next
month then seller must sell the home.

10. SSA
 CREDIT LEGAL AND TAX ADVICE. Seller is informed that a
short-sale may have credit or legal consequences and may
result in taxable income to Seller. Seller is advised to seek
advice from an attorney , certified public accountant or other
expert regarding such potential consequences of a short
sale.

11. Discretion
 Do not get too aggressive with argument as a court might
imply terms into the “contract” which could eliminate its
illusory nature.
 A court might imply a term that if lender releases the
deficiency then seller must sell.

12. MLS Rules - Foreclosure Roulette
 10.1.1 CONTINGENT STATUS. To better serve the membership and the
public a contingent status has been added. This will help alleviate the
frustration and better communicate the status of a property when the lender or
REO are reviewing offers. Here is the rule in its entirety:
 10.1.1. Contingent Status. The Mandatory Remarks field in the MLS must be
modified if any one or a combination of circumstances listed in (a) through (f )
are in effect and meet the criteria below:
 (a) Offer accepted contingent on court approval
 (b) Offer accepted pending lender approval of Short Sale
 (c) Offer(s) submitted awaiting lender approval of Short Sale
 (d) Offer(s) submitted awaiting REO approval
 (e) Offer accepted with __ hour first right of refusal
 Offers submitted to parties other than the seller as described in (c), (d) and (e)
are under review and are not considered accepted offers. Once the Mandatory
Remarks has been modified the listing shall be moved into a Contingent status.
Listings in a Contingent status are considered to be on-market and under a valid
listing contract.

13. Keeping Agents Happy
 Offer too low – but in tough markets
 Perhaps set up a two week intake period.
 Plus we do not know what the banks will be accepting in a
few months
 Offer too high
 Offer just right but needs concessions
 Offer from an agent who does not understand the SSA and
starts making demands or insists on escrow
 Offer from FHA or VA vs. Cash
 Sometimes your clients take a while and you get many offers
 Should you ever send more than one to lender

14. Keeping Sellers Happy
 Concerns about price
 Take highest? Maybe not
 Counter highest and best? Maybe not
 Taxes?
 Capital gains
 Pride
 Explain deficiency negotiations
 Perhaps send them out with electronic signatures
 Perhaps have them do the SS Package upfront
 They seem to love buyer feedback
 Some want to keep the deposit and can be difficult.

15. Keeping the banks Happy
 How do they handle low medium or high offers
 Can you trust that the banks will handle your offers
intelligently
 Why might you have a few offers in the hopper
 What if second wants 10000 to release deficiency
 What if you do not have your client sign offer? Or you attach
an addendum.
 How do you get buyers to stay locked in on the deal and still
have an offer which will appraise?

16. Buyer Strategies
 Quid Pro Quo
 Right of first refusal
 Client’s only offer in exchange for info
 Send emails saying you have qualifed buyer to short sales
which have been on the market for a while.
 Early inspection
 Deposit
 Maybe get approved by sellers senior lender with a mortgage
guy or gal who has some pull.
 Provide DU
 FHA buyers can be better than cash offer
 Giving seller and agent comfort you will close if seller gets
approval

17. McConnin & Company Realty
 john@favoriterealestate.com
 www.upsidedownrealestate.com