multiple offers on a short sale or REO

I know it seems like it would be a good thing. In some instances it is. Like when the seller is able to make money on the deal and every penny raised is a penny earned, and the sale will be swiftly over and such. BUT in many situations it’s not. Short sales and REO is a totally different ball game.

In short sales it’s the very worst. The price asked for is either not approved by the bank or was approved by the bank and still may be subject to further review. The seller is the person losing their home; usually in a severe emotional state and usually being displaced after the sale is completed. This feeding frenzy on their home is emotional and unbeneficial to them; they are stuck in the middle of frenzy for their home. Usually this causes further stress, sadness and frustration for them. OH and the buyers and their agents tend to get hostile also. Short sales are complex and so many unpleasant details go into them. All that in addition to a bidding war cause major drama. I, as a short sale agent have not had a calm and reasonable experience with multi offers on shorts ever. I have been threatened, questioned, insulted, and spend several days cleaning up the mess a short sale multi offer creates. In the midst of that I have an even more bruised and battered seller than before it occurred.



Warning to buyers and seller in multi offer situations. The listing agent USUALLY is doing their best to accommodate all parties. The seller is USUALLY really sad to be selling. The other offers USUALLY are all trying aggressively to get that house and not focusing on the sensitivity required for that seller. Tips to navigate for buyers- Your agent is your voice with the seller and their agent. NEVER get too annoying or aggressive. ALWAYS treat the seller with respect and understand they are losing their home. This is not about the money, this is about the loss. Tell them that you are not an investor, tell them you love their home and will take good care of it. Tell them you are sorry they are losing the home. Don’t threaten the other agent, don’t bother the seller. Just submit a clean offer and a good faith letter and stand back to hear if you got the home. AND also remember that winning the bid is just the first step. It’s still a short sale and there is still much to be done that won’t be fun either. The main goal is just to stay calm and be patient.

In REO (bank owned) the bank is the seller and they are presented all offers usually by a deadline. An asset manager selects once offer and verbally accepts, and then signatures take several more days to get. This process drags on. This can cause the buyer selected to already be on to another property by the time a decision is made at the bank. Also in REO the price accepted is usually higher than the list price. Unlike the past few years when the price accepted was usually less than asking price.