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Follow-up on earlier thread. We submitted an offer below the last price the bank countered at (to an earlier, even lower bid), and the seller accepted but the agent just now (a week later) said a higher offer had come in and we needed to up our offer if we wanted to be first in line (his phrasing to our realtor was actually that a higer offer had come in but since ours was submited first he'd be willing to work with ours if we increased it). I understand that nothing is certain until the lending bank accepts the offer and there's a closing, so other offers could still come in and be considered. Would the person who submitted the offer right after ours (the higehr one) now be given a chance to increase their offer? We did sell a house via a regular sale a few years ago and there was a brief bidding war. We're considering increasing our offer but that would be it.
Different parts of the country seem to handle these things differently. In Florida, (in my experience anyway) short sale contracts typically include a short sale addendum which, among other things, states whether the seller can continue to market and accept backup offers for the property. However, those backup offers are in a second position and the first contract is the only one that is submitted to the bank. Even if a higher offer comes in after the first contract has been executed, it basically sits dormant until the first contract runs its course.
Check your contract carefully to see if this issue has been addressed.
I wouldn't rush to offer more money. Remember that both the seller and lender are losing money on a short sale and are interested in doing whatever it takes to minimize their losses. Good luck!
I wouldn't rush to offer more money. Remember that both the seller and lender are losing money on a short sale and are interested in doing whatever it takes to minimize their losses. Good luck!
But if we don't offer more, and there is the higher offer the realtor just alerted us to, wouldn't we be out of the running (unless the first offer falls through, of course)? Realtor says we could still back out up until the actual closing (e.g., if we find something else).
Yes you would, if that offer is genuine and goes through. Maybe it isn't or won't, no way to tell at this stage. Depends on if you badly want this particular house and have some room on price. If I wanted it badly enough, I would just offer highest and best offer and see what happens.
OTOH, I have never felt like that about a house during the years I've bought and sold - now selling my 4th house and then will buy my 5th.
depends if it went to the bank yet. Last I heard that other offers just wait. The seller and agent can submit the highest offer and delay submitting it to the bank. cash in on his commision
I wasn't clear. It is the seller's agent who reported that a highr bid than ours had come in and told our realtor ours could be #1 if we raised our offer. My question was whether, if we increase our offer, whether that other person would also likely be given the opportunity to increase their initial offer (as we were). I understand that maybe only one offer-- the highest-- ends up going to the lender (bank).
If you decide to send in another offer, have your agent send a confidentiality agreement (and get it signed!) before sending in your offer. Then they can't share any details about your offer to the other bidder.
Another thing to consider is the appraised price of the house. When our lender ordered our appraisal, the house came in under by $2000 from our offer. Luckily, our lender fought for an amendment and got the appraisal to match the offer. If not, we would have had to come up with that extra $2000.
But if we don't offer more, and there is the higher offer the realtor just alerted us to, wouldn't we be out of the running (unless the first offer falls through, of course)? Realtor says we could still back out up until the actual closing (e.g., if we find something else).
Since you were told there is a better offer than yours, yes, you have to assume that unless you improve your offer you will not get this house.
And be careful about thinking that you can "back out up until the actual closing." Yes, you can always back out, as you can't be forced to buy a house you don't want. There will likely be ramifications, however, as you will have signed to a legally binding contract. Your deposit monies, at the very least, would be at risk, and it's also possible you get sued for any other losses suffered by the seller as a result of your backing out of the agreement.
As in so many instances, CHECK YOUR CONTRACT!
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