Stephani: "Short sales" are a pain. Everything is a guessing game. This would be the situation. A desperate Seller calls a Real Estate Agent and tells him/her their home/condo is worth less than their mortgage amount. Also, the interest rate is adjusting and they will not be able to afford the future payment. They want to do a short sale to "preserve their credit". The agent gets together with the Seller, suggests an asking price, the Seller says OK and the agent puts the property in the Multiple Listing Service. In the meantime, the Seller has to prove to the Lender that they don't have any savings, investments, etc. and they are basically broke and they have to offer proof of it. Now, an offer comes for the property (your offer). The Agent needs to notify the Lender that there is an offer on the property. The Bank, if they are organized (and they are not), send for a BPO (Brokers Price Opinion) and if the offer is too low they will say no after many weeks. So, making offers in short sales is never a sure thing. I have a Buyer with 3 offers on 3 different short sales and neither has answered in a few weeks. My mentality, the first Lender that accepts the offer gets my Buyer. In the meantime, higher offers may come like in your case. Usually agents will not lie about having another offer; it would be highly unethical. If the Agent says they have a much better offer than yours (like $ 100,000) more, it would be a loss of time for the Bank to counter your offer. A better deal is going after Bank owned properties. Banks are faster to answer; sometimes in as little as two days. Also, another alternative would be to go to the steps of the courthouse where the auction will take place and make your offer. Of course, you have to be prepared for that, have a cashier's check ready and a letter of preaproval from the Bank. Of course you need an experienced agent to help you out.