short sale bidding wars (short sales, real estate, foreclosure)

[webmc]

Does anyone have recent experience with a short sale where they placed an offer only to have someone come in behind you slightly higher? If the 1st buyer to place the offer counter offers the 2nd with a higher price does this process keeping going on until someone gives up? Any insight would be appreciated.

[bentlebee]

I tall depends on what else is going on....How much cash, when can you close, etc...

[algia]

The bank will accept the highest offer, because it is a short sale, this means the bank will take a lot less money than they originally lend to that customer.............so of course they want to make as much back as possible.....I wouldn't get involved in buying a short sale...or foreclosed homes for that matter (yeah, I know someone WILL have too buy them eventually)........my husband works in real estate and tells me horror stories about these short sales all the time. Just last week my hubby he had someone buy a property that started as a short sale, then went in foreclosure and then after the new buyers bought it, the lender forgot to update their records and sent out people and removed the new buyers stuff, put everything in the dumpster can you imagine THAT?.....wayyy to many people that don't know what a heck their doing.........the owners in these short sales usually get a "negotiator" so....yeah, they will wait until they'll get the highest offer.......because in most cases the owners of such properties will have a difference to still pay...........so you can imagine they will want that difference to be as small as possible.

[TampaKaren]

Every transaction is different. In one transaction, the asking price for the house was so low they got 10 contracts in a week. After the BPO was done, the bank rejected all the offers, the list price went up and the house was foreclosed on. In another transaction, there were 6 contracts...all about the same net to the bank. After two weeks, the listing agent came back to the buyers agents and asked us all for our "highest and best." The buyer I was representing backed out; but several buyers modified their contracts and the house was sold to the buyer that yielded the highest net to the bank. I'd suggest any bidding war with a seller in a short sale position is a waste. The bank still has to approve and the house has to appraise.

I agree with Algia that some people don't know what they're doing which is makes a complicated process even more difficult. If you're working with experienced professionals, they can advise you. If not, do your research on the house (comps + condition, etc.), don't get emotionally involved, and make the offer that makes the most sense for you. If your contract is accepted then you move forward with inspections. If your contract is rejected, keep looking...there's a lot to choose from at this point.

[glastron_79]

My husband and I had an offer in on a short sale last summer. What a waste of time. Same thing, kept hearing about other bidders that came in over us. We didn't budge. Nothing ever happened after four months so we just backed out. The home never sold and the owners are still there.

I wanted to add that the owners have no lis pendens on their record (I searched their name under public records.) So, I doubt the short sale was even approved and I doubt our offer or other "ghost offers" were ever presented to their bank. Just an attempt to get a high offer close to what they overpaid.