Las Vegas, NV – April 11, 2011 – (RealEstateRama) — Question: There are many short sale properties on the market in Nevada. Is it legal for a buyer to place multiple offers on multiple homes?
The short answer is yes, it’s perfectly legal (at least in Nevada) to place multiple offers on multiple properties, however, there are potential legal ramifications for a Buyer who chooses to write multiple offers to purchase property.
Every situation is different, and there are no blanket answers for a question like this. In the Las Vegas real estate market, if you are interested in purchasing a short sale, you almost have to submit multiple offers. It doesn’t seem prudent to submit one short sale offer, and wait 3, 6, 15 weeks or more to get an answer…an answer that might just be “No Thanks” so you wind up starting all over again.
While there is no actual law prohibiting a buyer from placing multiple offers on multiple properties, the questions which should be addressed are, “Is this ethical and can failing to disclose this action harm a seller?”
Most families who choose the short sale option are unable to make their monthly mortgage payment. Additionally, most banks do not take a short sale request seriously if the seller continues or has the ability to continue making the monthly payment. Imagine you and your family are experiencing financial hardship and decide, after much research, to short sell your home. After placing your home on the market, you receive (what appears to be) a strong offer after 30 days. Your Realtor looks over the offer carefully and determines that the buyer’s financing is solid…so you decide to accept the offer. After waiting 1-3 months (or more) for the bank to respond, you finally receive the good news! Your short sale has been approved! Imagine calling the buyer to share this information only to have the buyer’s agent inform you, “Sorry…the buyers found another home and would like to cancel escrow immediately.”
As a seller, you are devistated. You are now 4 months closer to a trustee sale date…with no buyer. You basically have to start over from scratch. Since the buyer failed to disclose that they placed multiple offers on multiple properties, this seller has clearly been harmed. If the seller is unable to find a new buyer and get the short sale re-approved, the seller now risks foreclosure and being sued by their bank(s.) A trustee sale (or auction) typically happens 6 months after a homeowner stops making their mortgage payment.
How can this be legal? Shouldn’t a buyer and buyer’s Realtor be required to disclose if they are placing multiple offers on multiple properties? A seller should have access to as much information as possible to make an informed decision regarding whether to accept, counter or reject an offer. While there is no specific statute which requires a buyer to disclose whether they are placing multiple offers on multiple properties, buyers and Realtors representing buyer’s should beware. A seller may decide to go after the buyer and buyer’s Broker for fraud if they execute multiple purchase agreements. Additionally, a Broker who fails to disclose knowledge of a buyer placing multiple offers on multiple properties could be guilty of fraud in a civil court case.
Does the seller have a valid argument for fraud? According to NAC 645.605, “Considerations in determining misconduct by a licensee” this statute includes the following verbiage, “In determining whether a licensee has been guilty of gross negligence or incompetence under paragraph (h) of subsection 1 of NRS 645.633 or conduct which constitutes deceitful, fraudulent or dishonest dealing under paragraph (i) of that subsection, the Commission will consider, among other things, whether the licensee:
•Has done his utmost to protect the public against fraud, misrepresentation or unethical practices related to real estate or time shares.
•Has breached his obligation of absolute fidelity to his principal’s interest or his obligation to deal fairly with all parties to a real estate transaction.
•Has acquired knowledge of all material facts that are reasonably ascertainable and are of customary or express concern and has conveyed that knowledge to the parties to the real estate transaction.
Based upon the above criteria, it would seem that the most ethical way to protect all parties would be disclosure of all pertinant facts, including but not limited to the disclosure of a buyer writing multiple offers to purchase multiple properties.
According to Bill Myers, Nevada Short Sale Expert and Owner of The Myers Team at Century 21 Moneyworld, “It is amazing to see Realtors proclaim themselves to be “Short Sale Experts” yet many have no idea how to protect or properly represent a seller in a short sale transaction.” Additionally, Myers said, “Most real estate laws are designed to protect buyers, however, sellers have rights too. The reason to do a short sale is to minimize the possibility of being sued by your bank. Using a Realtor who is inexperienced with the short sale process, could wind up costing you a foreclosure, in addition to an expensive lawsuit.”
Myers protects his clients from the above scenario by including the following verbiage in every counter offer, “Buyer warrants that Buyer has disclosed to the Seller any information that may materially and adversely affect the Buyer’s ability to close escrow or complete the obligations of the contract.”
The Myers Team is ranked the #1 Short Sale Team in Nevada. In 2010, they closed more short sale listings than any Realtor or Broker in Nevada.
For additional information, please visit http://www.NevadaShortSaleInfo.com