In a short sale, the bank is not the owner and therefore does not have the right to decide which offer to accept. However, in North Carolina short sales, all lien holders must be informed of offers, even if there is a signed contract between the seller and a particular buyer. A contract is between the seller and the buyer, not between the bank and the buyer. The seller decides which offer to accept. Once that offer is accepted, the seller and buyer are committed to each other per the terms of the agreement. The fully signed contract is then submitted to the seller’s bank to see if they will be willing to accept the net proceeds of the sale. The seller is responsible for deciding which offer has the best chance of being approved for a short sale by their lender.
North Carolina law states that a lien holder who might receive less than the full amount must be notified of the existence of other offers. Sometimes the notification can simply consist of an email sent to the lien holder informing them of the presence of another offer. Sometimes it could be a phone call to a lender’s representative. Unless the lien holder specifically asks to see the other offer, it may be sufficient to simply notify them of the presence of another offer.
There have been cases where the bank’s representative demands to see all the offers. In North Carolina, they have the right to do so. In some cases, the representative does not need to see the offers but merely asks for some details about them. These details could include the offer price, the proposed settlement date, and the type of financing, if any.
A North Carolina real estate broker must present all offers to a seller, even if the seller has already signed and accepted an offer. The seller may sign one other offer in a back-up capacity. For example, imagine a situation where four offers come in on a property. The seller could sign one offer to go under contract, and they could sign a back-up offer, and then they could keep the other two in a file folder just in case. If the first buyer terminates the contract, then the back-up buyer could go under contract. If that is terminated too, then another offer could be accepted.
A North Carolina broker may continue to market a short sale property for sale even if there is a signed contract. How aggressively the property is marketed is up to the broker and the seller. After all, if there is a solid, reasonably-priced contract in place, that may be all the seller needs. The buyer may feel reassured that they will not be pushed out of the way.
If the bank has taken the property back via foreclosure, then the property is owned by the bank. The situation is no longer a short sale. The bank sells the property and therefore has the right to decide which offer to accept.