Since the lender has the last say on a short sale, and is losing money on the transaction, low-ball offers are not likely to fly if buyers are competing. They are also often offered at the low end of the market value in the hope of making a quick sale, and you may want to consider offering the list price for any home you really want. Without more info about how the "recently sold home" in the neighborhood compares to a specific home in which you may be interested, it's impossible to say whether your decision is based on sound reasoning.
The term "counter" seems odd..... What would not be odd is for a bank to come back (even after a really long time) and ask for your final and best, or simply let you know you are out of the running with your current offer, but may resubmit another offer.
If you presented a low ball offer, the bank may easily simply ignore it........not even acknowledging it to the agents,
I do not suspect that your agent is playing games with you. Your agent has no purpose in having you sit without any indication of acceptance or rejection. Your agent wants you to buy a property that meets your needs and one with which you will be happy. When you sit in limbo, so does your agent. You may sidestep other possible properties while awaiting a response from the bank. Your agent has no reason to promote this situation. For agents, working short sales is time consuming, and frequently results in no sale, while delaying the buyer from pursuing other properties. I don't know every detail about your agent, but.......from knowing short sales........I can take an educated guess that the obstacles rest with the bank and not the agent.
I don't think you are being tricked. You are simply dealing with a bank, and the bank will work on it's time frame, and only it's time frame. This type of delayed response would never fly in a seller->buyer transaction represented by agents without bank (or other corporate/legal) involvement, but, because it's the big banks.......it can and does happen......every day.
It takes a long time to get an answer from the Loss Mitigation Specialist, an employee of the Lender. Once they have their paperwork in order, there are often multiple offers that have been submitted to them. I would think that your Realtor is being straight with you and not trying to drive the price up. This situation is just as frustrating for most Realtors as it is for the Buyers.
If this is a decent property, and you are making ridiculously low offers, it makes perfect sense that there is additional interest and higher offers on the table. Sometimes by playing games, you can be left out of the competition.
Now when your agent tells you that there are multiple offers, have all of these offers been submitted to the bank? As stated previously, typically the seller signs and accepts one offer and sends it to the bank. So that's the only question I would have.
I hope that this information is somewhat helpful.
Rodeo Realty-Fine Estates
Pet Planet Realty
The Pet Friendly, Eco-Friendly Realtor
(copy and paste the web address into your browser) for more information about what to know before you write an offer on a short sale property.
Dre Lic #01712757
1) Both the properties have been advertised for nearly 3 months and don't have leneder approval yet (as per the listing agent) and got the appraisal only this week. The listing agent says, she will sent the offers to the banks after she gets the lender approval which should be coming anytime now.
2) They listing agent is telling my agent that he/she has better offers and then my agent comes back to me and I make a higher offer.
So the bank is not involved yet. How do I know/confirm that the listing agent has better offer except to trust his/her word coming via my agent. I trust my agent but I'm getting little concerned that if she is being tricked by the listing agent.
Now my offers are higher than the last one sold and I've decided that it's enough. I'll keep you updated.
btw- May be it's not called "counter" as you have pointed out. May be called best offer but I've given multiple best offers on both properties.
The Feds spent nearly 6 hours with the big banks last week discussing how to resolve the 2nd lien holder problem. One of the proposals is for the first lien holder to give some sort of token paymnent to the 2nd holder if they agree to a short sale. The other big problem with the 2nd holders (also the first) is that they don't have the staff or money to process. The banks are overwhelmed.
Expect to see more short sales going through later on when all this gets figured out. In the meantime, you'll need to make offers on many of them in order to get one to stick. I found it to be too much of a pain and decided to just buy an REO.
Your statement: "I've reached the price level of recently sold home in the neibourhood" is very telling, and a good illustration of why short sales aren't always a good deal. Take, for instance, a house that sold at the peak of the bubble for $600,000. The lender's into the property for $600,000, plus all of its expenses. Properties in the neighborhood are now worth $500,000. The house comes on the market as a short sale at $475,000. Then, through the process you're experiencing, the price gets bid up to $500,000. The bank's still losing over $100,000 on it, so they're not the most cooperative seller. On the other hand, the purchaser is no longer getting any bargain. Instead, he/she is going through the stress and aggravation you're describing in order to buy a property at market prices.
There are plenty of bargains out there that aren't short sales. Consider, using the same scenario above, that someone bought the house in 1990 for $190,000. Other houses are now selling for $500,000. If the owner has to sell, or wants to sell, he may be quite willing to accept $475,000. It's still a nice profit for him, and a good price for you.
Hope that helps.
First of all, short sale properties are sold short of what is owed on them making them (Most of the time) fabulous values. And, yes, it can start driving up the price if the home is really nice and there are many people interested in it. However, when a bank puts a home on the market a BPO had been done on it by many agents. This is a broker price opinion and it much like a comparative market analysis. So, they know what the value should be. I would not try to low ball a short sale since it is already being sold short of what is owed on it. Many banks won't accept the price you have offered. They can be much worse than a regular seller because really, they don't seem to care. It is just another file or transaction to them. And, the banks can take a ridiculously long time to get back to you because they are inundated with short sales and foreclosures now. Short sales can be fabulous deals, but you will have to be patient with the banks once you get one accepted by the seller.
I would keep trying and listen to your agent. He/she is only trying to help you. I hope you get the home you want. Good luck! If you have any other questions, feel free to comment. I hope I have helped answer your question.
Keller Williams Realty
They will rely heavily on the listing agent for information regarding the level of interest being shown. They are trying to take as little hit as possible.