Frequently Asked Questions

Legal Hotline FAQ

a blog of the most frequently asked questions to the MAR legal hotline.


Cindy Sellers
Cindy Sellers
Cindy Sellers's Blog

. I represent a seller in a short sale transaction.

Though the inquiry can be made at any time, it may be advisable for the seller to contact the lender when he/she has decided to request a short sale, which would be at the onset or at the beginning of the short sale process. Under Section 17-532(c)(1) of the Maryland Real Estate Brokers Act, a licensee shall, unless otherwise specified in the brokerage agreement, present in a timely manner all written offers or counteroffers to and from the client, even if the real estate is subject to an existing contract of sale or lease. The REALTOR® Code of Ethics contains a similar provision.
Given this requirement, the best practice is to ask the seller/client for instructions.  In turn, the seller should ask the lender for instructions based upon its policy.  If the lender requires the seller to forward offers after the property is under contract, and the seller asks you to do so, you must follow those lawful instructions and submit offers to the lender notwithstanding the property is under contract.  Note that not all lenders will require this, so it’s important to ask. 
Finally, if you are using the MAR Short Sale Addendum to the Contract of Sale, you should review paragraph number 7 of that Addendum, which reads as follows: 
OFFERS AFTER CONTRACT ACCEPTANCE.  Buyer is hereby notified that Seller may have the right to continue to market the Property after the Date of Contract Acceptance pursuant to a written agreement between Seller and the listing broker, and Seller may be required by a Third Party to present subsequent offers received by Seller to the Third Party.
This language was included in the Short Sale Addendum to provide notice to the buyer that the seller’s lender may require the seller to present subsequent offers to the lender for review.  
 


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