For a short sale property, does the bank take the initial offer or does it look at all offers before selecting one?

Asked by Edna, Vacaville, CA Sat Jun 16, 2012

Does it pick the highest offer? First offer?

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John Sefton’s answer
John Sefton, Agent, Long Beach, CA
Mon Jun 18, 2012
With short sales, most lenders want to work with one offer at a time. If there are multiple offers, the seller picks the offer to be submitted to the lender. It in the best interest of the seller to select the offer that is most likely to be accepted, which is usually, but not always, the highest net offer.
0 votes
The Spears T…, Agent, Vacaville, CA
Tue Aug 5, 2014
Jessica, The current owner will make the decision on what offer to accept and the agent will submit that offer.
1 vote
Michael Brow…, Agent, Allen, TX
Tue Aug 5, 2014
Banks have the luxury of of handling offers at their discretion; in my experience, regardless of how many offers are received, the bank will choose the most appealing offer even if it is the first one.
0 votes
Jessica Aggs…, Agent, Paso Robles, CA
Mon Jun 9, 2014
Hi Edna,

First the seller looks at all offers and they pick which one they want to go with. Usually it's the highest and best offer a seller will choose. Then the agent sends the offer to the bank after it has seller and buyer signatures on it. The bank then decides if they want to accept it or not. It's a longer process than a standard real estate transaction so keep that in mind.

I wish you much luck!

Thanks,
Jessica Aggson
(Recently featured on HGTV's show House Hunters)
Re/Max Parkside Real Estate
805-610-3536
JessicaAggson@gmail.com
0 votes
Alfred McCoy, Agent, Fairfield, CA
Mon Jun 9, 2014
Depends on the Bank some for example will send the property to auction.com to see if they can get more money
0 votes
RL, , Vacaville, CA
Thu Oct 18, 2012
We recently bought a Short Sale. There were 7 offers. Look at the ad and see if it mentions something personal property that is not included, like a greenhouse, shed, above ground pool, hot tub, etc. In our case, the (detached) shed was not included. We offered $3,000 separate cash for the shed, which was worth less than $1,000. Often that is the only cash the sellers will walk away with. It might increase your chances of being 'picked' over the other offers.
0 votes
Terry Bell, Agent, Santa Rosa, CA
Mon Jun 18, 2012
This is where it is important that you have an agent that you are working with to answer all your questions BEFORE making an offer on property. There's a lot of strategy involved in making offers and especially now when there are multiple offers on the table again, you want to know the whole process. Your agent will explain to you that the prices on homes for sale as a short sale, are set by the listing agent and owner, but have to be approved by the lender. You and your agent need to review the status of the property that you are interested in buying. Are there other offers on the table, has it been sitting for a long time with no offers because of some issues, these are some of the types of things that will determine what offer to make.
0 votes
Abel Duenas, Agent, Vacaville, CA
Mon Jun 18, 2012
Hello Edna,

Most banks usually only want to look at one offer, so they leave it up to the seller (with advise from listing agent) to determine which one will be reviewed. There is a misconception that the "highest" offer will be picked, but that is usually not true. I will help guide my clients to select the "best" offer based on the buyer's willingness to stay for the duration of the short-sale time process, how strong the buyer looks in regards to their loan approval or proof of funds (if all-cash offer), flexibility on adjusting offer/closing costs if needed/requested by short-sale lender and how clean their offer is (asking for repairs, closing costs...etc).

When I represent a BUYER, I also try to use these same principals and write offers as "clean" and "strong" as possible so their offer is the one chosen.
0 votes
Felix Hung, Agent, Huntington Beach, CA
Sun Jun 17, 2012
Edna,

The owner (with recommendations form the listing agent) select the offer to send to the bank. You have to have the owner accept your offer THEN you have to have the lender approve your offer for it go to escrow.

The offer picked is usually the cleanest and best offer with the best likelihood to close.

Felix
0 votes
Ron Thomas, Agent, Fresno, CA
Sun Jun 17, 2012
In California, it has been my experience that the Bank will give instructions to the Listing Agent as to what their requirements are and which offers they want to see:
They may want to see only the highest and best offer, (not necessarily the same thing).
The Seller, (homeowner) has some say in the matter; but not a lot, especially if they want to sell the darn place.
Shortsales do not garner multiple offers that often; that is usually not a problem.

So, have your Realtor do a CMA, put together your Offer, (don't waste your time with a Low-Ball offer) and be prepared to wait.

Good luck and may God bless
0 votes
Diane Harout…, Agent, Ridgewood, NJ
Sun Jun 17, 2012
Since the sellers technically own the home, it is their ultimate decision which offer to sign (that is if there is more than one offer on the table simultaneously). Once both parties signs, it becomes a contract, except now, the Bank will make the final decision to either accept, reject, or counter. All types of considerations are made from a Sellers perspective, paying close attention to financing. If you are NOT chosen as the initial offer, keep your eye on the property, and its activity on the MLS, and check on the status periodically. Many times the initial offer is withdrawn, and the house becomes available again. Let the selling agent know your interest and keep yours as a back up offer, and to contact you & your agent if there is any change in status. Short sales require patience from buyers, and their attorneys should have a good handle on how the process works.

Diane Haroutunian
Coldwell Banker Residential Brokerage
201-262-6600x165
0 votes
Cindy Davis, Agent, San Diego, CA
Sun Jun 17, 2012
Generally, it there are more than one offers given to the bank, the lender will choose the strongest offer or top offers to respond to.
0 votes
Olga Cisneros, Agent, Vacaville, CA
Sat Jun 16, 2012
Hi Edna,

The owners pick the best offer and submit that best offer to the bank. That offer gets reviewed and it either gets appproved, denied or the bank them counters the terms. Some Short Sales can be lengthy. 3-6 months, sometimes even longer time of waiting for the short Sale approval.

Olga Cisneros
Re/Max Gold
707-685-4764
0 votes
Vicky Chrisn…, Agent, Purcellvile, VA
Sat Jun 16, 2012
Generally, they don't look at offers... they get a contract, and either approve the short sale request, deny it, or counter the terms.
0 votes
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