Looking at short sales and foreclosures? Better have your agent call the listing agent before you take your time to go see them – chances are that they may already have an offer in and you’re wasting your time and energy. And if the listing agent doesn’t answer their phone or call back (which happens more than half of the time, in my experience), then I’d cross that one off your list. Let me explain.
I only have a handful of ‘rants’ on this blog, but it’s time for a new one: Banks and listing agents who don’t update listing information on foreclosures and short sales when they already have offers on those properties. Here’s the dilemma. Listing agents represent the seller (the bank, in the case of a foreclosure), so ultimately their fiduciary duty is to that seller. When an offer comes in, the agent submits it to the bank, who might sit on it for months. (See my post: Foreclosure Risks: Unpredictable Timing).
During that period, the property is continuing to be marketed as “active” so buyers call their agents and agonize over whether to buy, how much to offer, etc. Agents likely even call the listing agent to try to get more information, though in my experience, again, those agents rarely answer their phones or call back. I guess they're too busy not marketing all of their foreclosure listings. Finally when I reach someone at their office live, I’m informed “Oh we have multiple offers on that one already in process.” ARGH!
So why didn’t they update the status to ‘pending’? Because technically a contract is not yet ratified (accepted and signed by the bank.)
Why didn’t they at least update the comments to say “offers already received”? Well, that depends on the agent. My opinion is that they should disclose that fact, but the argument against it is that updating the comments to restrict further showings would not be in the seller’s best interest. Sometimes they claim the bank has instructed them not to update the listing (though I find it hard to believe that today's overwhelmed loss mitigation and REO departments find the time to micro-manage a listing like that.)
After all, contracts for foreclosures fall out all the time following inspections, review of condo documents (IF you get them, which is unlikely) or other reasons. To best represent the seller, an agent should encourage further showings. Are agents doing this to best represent their client? OR are they are just too lazy to update the listing? Besides, it’s not an inconvenience to the listing agent anyway – it only wastes the time of the buyers and their agents.