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I put an offer in close to asking price on a short sale. I'm the 'back up' offer - the first was very low from an investor. What does that mean exactly...that if the bank says no to his bid, the whole process starts over again w/ mine? Would they even know there's a second offer on the house? Although I know the other guy was first, I don't understand the logic of the attorney in not putting a better, higher offer to the bank knowing it will much more likely get accepted (?)
I put an offer in close to asking price on a short sale. I'm the 'back up' offer - the first was very low from an investor. What does that mean exactly...that if the bank says no to his bid, the whole process starts over again w/ mine? Would they even know there's a second offer on the house? Although I know the other guy was first, I don't understand the logic of the attorney in not putting a better, higher offer to the bank knowing it will much more likely get accepted (?)
Well it sounds like the bank had already accepted the offer so this means you're first in line if something falls through. Most realtors or in your case you're using an attorney put in a 'back-up' offer in case the first one falls through. If both offers were presented at same time and bank hadn't made a decision, then that would be a different thing and being a bank, they most likely would have gone with the higher offer (but of course this is speculation not knowing all details). Who knows with banks - they might even decide to 'find' a way to not proceed with the investor so they can go with your offer which is in the 'first back up' position. With banks, you just never know what they're going to do, you know? But being first in line in 'back up' position is a good thing.
You don't know the bank would accept a higher offer. Often times the bank will go with a 'sure' thing, such a cash vs financing because of just that..it's a sure thing...regardless of the difference in price.
Also..sellers are supposed to be going into contract on one contract..the rest would then be back up offers. The seller knows it exists, the bank doesn't. (generally...depending on who is handling the negotiating) So, yes. If the first deal doesn't go through, yours would be next in line. Which, you will appreciate it's being handled this way if you end up first in line. Suppose you had your offer in as back up, get first in line and then someone else comes in at the last minute and offers more. You wouldn't want your offer just kicked aside, would you?
You don't know the bank would accept a higher offer. Often times the bank will go with a 'sure' thing, such a cash vs financing because of just that..it's a sure thing...regardless of the difference in price.
Also..sellers are supposed to be going into contract on one contract..the rest would then be back up offers. The seller knows it exists, the bank doesn't. (generally...depending on who is handling the negotiating) So, yes. If the first deal doesn't go through, yours would be next in line. Which, you will appreciate it's being handled this way if you end up first in line. Suppose you had your offer in as back up, get first in line and then someone else comes in at the last minute and offers more. You wouldn't want your offer just kicked aside, would you?
Hey PC, totally agree as like I said not knowing all the circumstances/details don't know what the specific situtation is (i.e., cash v financing) or how the back-up contract was written/negotiated. I must have misread OP's post because I took it to mean everything was going through the bank at this point and, in that scenario, OP was concerned that they (the bank) might not be aware of any back-up offers (i.e. OPs which was higher). And if it's going directly through the bank at this point, well banks are banks, so . . .
Op says it's a short sale. Here the short sale contract and addendum is signed by the owner of the house. Although there is a stip in the addendum that they are allowed to continue to market the property, if they sign a contract then that's it...the rest are backup offers. Or, supposed to be anyway.
so, basically, the only 'positive' in this may be that I'd be first in line should the first offer be turned down. AND if I do get a shot, it should conceivably be quicker since the process has been started with this first offer, right?
Let me tell you, too, I have tried hard to stay away from these unpredictable short sales, but that's all that seems to be on the market, especially in my price range.
....and one more question-
So we really can't know whether the bank is aware another 'back up ' offer is in the wings?? Is it usual that they do not know?
....and one more question-
So we really can't know whether the bank is aware another 'back up ' offer is in the wings?? Is it usual that they do not know?
I'd say talk to your RE attorney about this - from your OP, he/you knows the first offer was much lower and made by an investor, you're in the back up position and laws vary from state to state. At least when I worked on SS several years ago, once the owner signed off that they essentially just wanted/needed out, then negotiations were handled directly through the bank/lender as they had to approve the short sale in the first place.
However, things have changed a lot since then and, again, laws vary from state to state. Your RE attorney is the one who can really address your concerns regarding whether or not the bank is aware of your back up offer. So maybe give him a jingle and let him know about all of your concerns, since he's the one representing you and, of course, knows the entire situation and laws in your state. Best of luck. I know this is challenging for you.
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