Foreclosure in Los Angeles>Question Details

Denise, Home Buyer in Los Angeles, CA

Multiple offers on a short sales property...

Asked by Denise, Los Angeles, CA Fri Nov 9, 2007

I placed an offer on a short sales property. Now, about 4 weeks later, there are multiple offers for the same property and the bank is likely to proceed with the sale of the property. Will the bank ultimately select the highest bidder? Or are there other criteria they will look for? I will be putting down 20%, I am pre-qualified and have no contingencies. Also, any suggestions on what/how to counter-offer?

The property was listed at $800k and I put in an offer for $750k.

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Hi Denise,

It sounds life you've found a home that you really want. Unfortunately, short sales are not short! Why don't you have your Realtor see if he/she can glean any information from the seller's Realtor. Someone else mentioned a revised offer. I always recommend that my clients offer (when they really want the property) the highest dollar amount that they will be comfortable with not getting the property. This way there should be no "if we only had offered $20,000 more".

Generally the bank will go with the highest offer. But if that is higher than yours and the buyer has a smaller down, you may still be chosen.

Best of luck,

Karen Miller
1 vote Thank Flag Link Sat Nov 10, 2007
I do a lot of short sales and one thing is certain -they can be frustrating! Ultimately, the lender wants to net the most amount of money in the shortest amount of time. Once approved, they will be pushing for a quick close. Once someone on the lender side actually looks at your package (which can take weeks) they can choose to decline, accept, but more often than not, they will chose to counter ALL the offers received. A lot of potential buyers will walk at this point. I am assuming you have Realtor representation? Your Realtor should be able to find out more info and guide you thru any counters. Hang on for the ride - and good luck!
Web Reference: http://www.cindihagley.com
1 vote Thank Flag Link Fri Nov 9, 2007
The Hagley G…, Real Estate Pro in Pleasanton, CA
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In all the discussion I've read NO ONE has paid any attention to the SELLER! They still are the final say in the transaction!! The better the offer the less debt relief and/or recourse for the loan they face. Remember, the offer is subject to Lender Approval but can still be disapproved by EITHER party!! If the lender wants too much and Buyer can back out, too little the Seller can back out.
I've seen offers on "Short-Sale" properties all across the board. The "Short-Sale" should be structured as per Multiple Counter-offers, subject to Seller counter sign. Remember, the Seller still OWNS the property! The listing agent owes a fiduciary to get the MOST amount of money for the Seller. If he has to have 8 offers stack up so be it! You pays your money--you takes your choice!
1 vote Thank Flag Link Fri Nov 9, 2007
Denise,

Sounds like a good offer to me! The banks are looking to get out from under the property, and make as much as possbile as they are probably losing. They will take ALL the offers and pick the BEST one. The bets may or may not be the highest one. If you are a more solid buyer putting more cash down than the others, they may take yours over a slightly higher offer, especially if you have no contigencies and can close quickly. Remember, banks and lenders are in the MONEY business, NOT the Real Estate business. They do not want to own and manage property and it costs them more the longer they own it.
Good Luck and I hope YOU get the property!
1 vote Thank Flag Link Fri Nov 9, 2007
The banks like looking at multiple offers. My guess is they will look at what nets them the highest dollar in their pocket. Ask your agent for guidance in this arena.
1 vote Thank Flag Link Fri Nov 9, 2007
Pam Winterba…, Real Estate Pro in Danville, VA
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I agree with Mike. This is a great offer, but it depends on the listing agent representing the bank or seller. If they are inexperienced don't get your hopes up. Even a good offer can be messed up by an unqualified agent. But if your lucky enough to have a good selling agent on the other end, im sure they will see your offer as solid, and can communicate how great it is to the bank.

Good Luck
1 vote Thank Flag Link Fri Nov 9, 2007
The bank, like any seller will look at price, closing date, buyer's financing, and if there are any contingencies. It is normal for short sales to take a month or so to play out. I would suggest working with a Realtor (if your not) who has knowledge of short sales and the local market. it sounds like you made a good offer, good luck!
1 vote Thank Flag Link Fri Nov 9, 2007
The banks are ultimately more concerned with Money, but hte fact that you are bringing in 20% down in this market, they most likely will give you strong consideration.
0 votes Thank Flag Link Wed Jan 30, 2008
I always try and build into any short sale offer a "right of first refusal" for my buyer. Of course the banks will continue to review offers as they come in, but this will give my buyer the chance to step up to those offers or not. It sounds like the bank countered you so you at least had the chance here to decide if you were going to move forward? I have short sale expertise mainly in the Los Angeles area but every lender has been different. Help for Stressed Owners 24hr pager 877-870-4462.
0 votes Thank Flag Link Fri Jan 25, 2008
Thanks Karen and Michael. My realtor will not be able to help me until we hear from the bank. I am prepared to counter the bank's counter up to $775k, but I do not want to go above that.
0 votes Thank Flag Link Mon Nov 12, 2007
Denise, I think Karen is making a good point. Folks who come to "shor-sale" land looking for the best bargain on isle "A" find a whole bunch of folks there too! Don't overlook those folks NOT in foreclosure to make a deal. Many of these folks wish to get our of Dodge and are NOT to be overlooked. Just because you made a low ball offer to a lender doesn't mean the lender is willing to slash and burn. They all have stockholders looking over their shoulders (or at least the are looking now!).
0 votes Thank Flag Link Sat Nov 10, 2007
Hi Denise,

I hear this statement often, "I don't want this to turn into a bidding war". This is fine except that it's usually from someone who expects to get an exceptional deal on a home. If you find a home you want & want to pay below market you will be competing with others. That's just the way it is. One of the reasons you hire a Realtor is to guide you through the bidding process. Let that person stress.

If it's the house you really want, go for it!

Karen Miller
0 votes Thank Flag Link Sat Nov 10, 2007
Thanks for all the quick responses! So many helpful ones it's hard to pick the best answer. I will keep you updated as to the bank's response.

I am prepared to counter or accept the bank's counter-offer... but I hope this does not turn into a bidding war with the other interested buyers.
0 votes Thank Flag Link Sat Nov 10, 2007
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