If the seller decided not to issue any counter offers, that's the seller's decision, and the agent is required to execute/implement the decision accordingly.
That's why when writing an offer, buyers are advised to give it their best, because they may not get a second chance. Buyer's shouldn't count on getting a counter offer --- it's never a sure thing.
Highest offer doesn't always get it. Terms and conditions play a big part in selecting the offer that appeals the best to the seller.
During the peak of the market, when over-bidding seemed to be the norm, buyers and their agents looked for ways to distinguish themselves. Some buyers wrote letters appealing to the seller's emotion. Some wrote offers without contingencies (not advisable). Some buyers offered to pay for closing costs normally paid by the Seller.
But one thing remains constant: then and now, as listing agents, we always advise buyers and their agents to submit your best and highest offer from the get-go.
And, don't give up. This buyer may not hang around long enough to wait for bank approval, many buyers walk. Have your agent stay in constant contact with the agent, getting updates on the short sale progress, and stressing that you want your offer to stay in. Put it in writing by extending the short sale response date. Often, this date passes before the bank sends written approval. Also, try upping the offer price, in writing, to the top of the value range in that complex along with the date change. Include your comps. Sometimes agents will submit an offer with inflated offer price knowing it won't appraise and the seller will likely reduce the price.
If your offer had been accepted then your appraisal came in lower, would you be in the position of paying the difference in cash? If not, then you just saved yourself months of anxiety and headaches! Ask your agent to write up a formal back-up offer for the seller to sign. This may give you the opportunity to slide into firsts place if the current buyer walks away, before the property goes back on MLS as an Active listing.
OBTW, why waste your time and money on a law suit when you could use it for a higher down payment or home improvements! Stay focussed on your goal to find a unit in this building:)
Next time you REALLY want a property, submit an uber serious offer. Offer the highest price that you can, being sure the property will appraise at that price. Be sure, and this is important, to send comps in WITH your offer showing recent sold prices, substantiating your offer price. Some unethical agents will submit offers with inflated prices knowing an appraisal will come in lower, hoping the seller won't want to start over with another offer, and go with the lower price. You be the one to send those comps with your offer, and you can even include in your cover letter why you did. Also, send in your funds verification. This way the seller/bank will know you have the funds readily available to close. State your FICO scores in your cover letter if their high. Yes, it's above and beyond, but we have some pretty competitive areas here too, and YOU have to be the buyer that there will be no questions about. I do this will ALL of my buyers; it's extra work, sure, but why take chances in this crazy market?
Good luck to you!
Have you asked if you can be in back-up position?
It isn't unusual for short sale buyers to walk away when they get tired of waiting. That's why most short sale agents will continue to want to show the property and present it as "subject to lender approval", as well as encourage back up buyers.
Since you really want the unit....all the more you should pursue this avenue.
In your question it isn't clear if this is your agent or not. You need to clarify if this iagent is representing you or the seller or both.
I agree with other comments here that often a slightly lower offer is taken because it is all cash as opposed to dealing with a loan and appraisals, etc.
There are really many holes in this scenario that need to be filled in before sound advice can given.
I am both an Accredited Buyer's Repreentative and a Certified Distressed Property Expert, so I encounter this situation frequently.
First of all, Chris' answer that the buyer chooses the offer is incorrect. The seller elects to either accept, reject or counter each offer they receive. In a short sale, unlike a retail (regular) sale, any decision made on the part of the seller is not binding until and unless the offer is approved by the bank. So being first may be irrelevant, especially if another, better offer was received.
Your frustration is apparent, but in fact there may have been any wrong doing on the part of anyone in this transaction. Your option at this point is to wait and see what happens with the accepted offer; often escrows fall apart due to the physical inspection contingency or for lack of financing. In the meantime, ask for answers so that you can, in future, avoid a similar disappointment. If you wish, I have a set of questions to ask of the listing agent to help ascertain whether a short sale will be successful.
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I understand your frustration and disappointment.
But lawsuits wont help here. In the case of a short sale, it is the lender who ultimately decides which offer to accept.
And most often the lenders do not give any buyers the opportunity to come back with a better offer.
I sugest you get your agent to do a little door knocking and try to find someone else who may be getting ready to sell. Or, you could do that yourself too.
The buyer is the one who chooses the offer not the agent. Sometimes the best offer is not the highest but the best written. The listing agent and the buyer will select the best offer they believe will give them the best opportunity to close the deal. That offer may have been cash, or maybe asked for less in concessions.
Hope this helps!
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Keller Williams Realty Westside