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Were they lying?

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Bienes Raices

Orlando, Florida

Dec 31 '11, 08:53 AM


I made an offer through the short sale's listing agent. Early the next morning I received an email that the seller had not accepted my offer, and that they had another offer coming in. They wanted my highest and best.

It seems kind of suspicious to me--I wonder if there really was another offer. Is this just a technique to get the highest and best out of someone before submitting the offer to the bank?



Amanda Hensley

Real Estate Investor from Portland, Oregon

Dec 31 '11, 09:09 AM
1 vote


This happened to me both times I put offers in on short sales, and so I tend to think YES they are, or they were holding one offer back to see. I quit offering on short sales b/c of this, just got too frustrated.



J Scott Verified Moderator Donor

Real Estate Investor from Ellicott City, Maryland

Dec 31 '11, 09:29 AM
1 vote


The listing agent has a responsibilty to try to get the most money for his/her client. This is one way of doing that, regardless of whether there are other offers or not. This is very common with REOs btw...



Medium_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


Aaron McGinnis

Real Estate Investor from Atlanta, Georgia

Dec 31 '11, 10:01 AM
3 votes


Figure out what you're willing to pay. Offer that amount and don't go a penny more.

Listing agents will lie, cheat, and thieve as much as they can.



Bienes Raices

Orlando, Florida

Dec 31 '11, 10:08 AM


Thanks. I did increase my offer by $2000. Perhaps that was a mistake in hindsight, although I was prepared to counter anyway, so maybe no harm done. But if the bank tries to counter again later I'm not budging.



Michael Power Donor

Real Estate Investor from Riverview, Florida

Dec 31 '11, 10:13 AM
1 vote


Bienes / Don't take the situation as personal...it's just business. Throw another $3k on the table and you get the right for the bank to do the same thing to you again.

Put your best offer out there and move on to the next deal.

Good luck.



Bienes Raices

Orlando, Florida

Dec 31 '11, 10:31 AM


Originally posted by Michael Power:
Bienes / Don't take the situation as personal...it's just business. Throw another $3k on the table and you get the right for the bank to do the same thing to you again.

Put your best offer out there and move on to the next deal.

Good luck.

Michael, no I'm definitely not taking it personal--it's still a good deal even with the increase. Since it's currently an unapproved short sale I'm not counting on it coming to fruition anyway.



Nathan Emmert

Real Estate Investor from Byron Center, Michigan

Dec 31 '11, 01:06 PM


In negotiations, there is no presumption of honesty. It's not lying, it's bluffing... much like playing poker. Both sides will use the inequality of information as leverage during negotiations to try to get the best deal they can. As most negotiations are 1 time games, you're generally going for a homerun more than win-win.



David Beard

Real Estate Investor from Cincinnati, Ohio

Jan 01 '12, 07:45 AM


I want my listing agent on my deals to have a fierce loyalty and willingness to use all reasonable and ethical tactics to get me top dollar. (So I might use this person when I'm selling!) Calls for highest & best are the norm, so you just need to know your top dollar, and make judgments based on DOM, attractiveness of price, timing of any price changes, etc. [I know you know all this!]



Jim S

Real Estate Investor from Virginia, DC &, Maryland

Jan 01 '12, 08:59 AM
1 vote


My last property I just bought was listed for $285,000 with an arv of $330,000. It had a Dom of about 90 days. I bid $235,000. I listing agent came back with a highest and best. I told them that was it. After a week we were told $255,000 was the lowest and they dropped the listing price. After 2 more weeks I resubmitted $235,000. They ask for highest and best again. I stayed firm on my offer. I knew I needed about a $100,000 split to profit $40,000 on this property. The listing agent told my agent that the bank would never go below $245,000 and they would rather let it sit. We stayed firm.
We received a call about 2 weeks later asking us to resubmit our original offer.

The moral to this story is know what numbers are right for you in the deal and don't get caught up in the fever. The banks listing agents will do whatever they can to protect they client and to make their BPO look accurate. You need to fall in love with the deal not the house as your majority of profit is made on the purchase.



David Wedemire

Real Estate Investor from Bellingham, Washington

Jan 01 '12, 09:55 AM


I have to agree with the others. Figure your best price and stick with it. There are lots of properties available. It is all part of the process and just business.



Peter Giardini Donor

Real Estate Investor from Baltimore, Maryland

Jan 01 '12, 03:40 PM


Also, other then just changing the price... which often times just encourages more back and forth in the negotiations... consider making changes to the terms of your offer. Such as increasing the EMD or removing all contingencies.

There is no right answer... other then as has been suggested... know your highest offer price and don't go above it.



Joel Owens Verified Moderator

Commercial Real Estate Broker from Canton, Georgia

Jan 01 '12, 04:36 PM


With short sales it is a waste of time going back and forth with a seller to get to a price only to have to do it again with the bank on the loan and all other junior lien holders.

What you want is a pre-approved short sale.Someone else has already gone through the pain and anguish of submitting the offer and getting the price approved and are usually long gone when the bank gets back to them.You come in at the right time and strike a deal with the least amount of hassle.

This is also important because during the initial contact with the bank on the short sale it could take weeks or months to get an answer.

You go under contract for say 130,000 when it's listed for 140,000 subject to bank approval.2 months go by and the market has dropped down another 10,000 in values when you get a response.They have a high BPO from the bank and the bank wants 135,000.

Now you are looking at a 15,000 gap with the market diving down.Now the bank wants to order yet another BPO which takes more time and the market goes down again.

They are better with short sales now but a few years ago some would take 6 months to a year to happen.Great if the market goes up but not if the market goes down during that time as your contract price will be inflated.

If the property is pre-approved and the price is great short sales are worth it.If not there are too many other properties to look at.

Just tell the listing agent that is as high as you want to go and have others you are bidding on.Say if you want to get paid I am a serious buyer so see if you can make the bank accept the offer.

If they really have another offer they will tell you bye,bye.If you are the only game in town and they were bluffing they will try to push it hard.

Unlike an REO listing agent the agent is not getting more listings from that client on a short sale.The best they can get is a referral from their client they did a short sale on.

Not many people say "Hey this agent did a short sale on my house and it was great and you should use them if you can't pay your mortgage".

Most will want to keep stuff like that private.



Medium_allworldrealtyJoel Owens, All World Realty
E-Mail: [email protected]
Telephone: 678-779-2798
Website: http://www.AWcommercial.com
www.AWcommercial.com 678-779-2798 [email protected]


Sheyenne Schultz

Real Estate Agent from Torrance, Ca

Jan 01 '12, 07:12 PM


I agree with you. It IS suspicious. I'm a short sale agent and I see alot of this in CA. Whenever I see an agent asking for "best and final" it disgusts me. And it tells me that THE agent doesn't have a clue what they're doing regarding short sales. Why would an AGENT want to show the bank a HIGH offer? By keep making potential buyers bid higher and higher and THEN submitting a HIGH offer to the bank??? Tells me, for one, they'd make a lousy poker player and stay far away. Think about this...and it takes an agent like this to do this to a homeowner's home and lose it to finally understand short sales, but at the cost of their client losing their home. Think..you submit a HIGH offer to the bank. Now the bank then wants a HIGHER price than what was offered, because remember the bank wants to NET as high a price as possible. So this home gets approved at either this ridiculously TOO HIGH of a price to begin with OR gets approved at a price HIGHER than what the moron agent submitted an offer at. Either way, the bank wins and the agent and buyer lose. So when the bank comes back with an over inflated price and the buyer who made the offer WALKS..and THEY WILL. Then who is left holding the bag???Now this moronic agent has an APPROVED short sale on their hands with NO BUYER. Now they have to get another buyer asap to prevent foreclosure and at an OVER inflated price? So the clock is ticking and the moronic agent is marketing the APPROVED short sale to obtain a new buyer, and when NO BUYERS come forth at this ridiculous price, the home goes into foreclosure.....Gee...OOOPSIE!!!

My advice? If you make an offer and agent's are telling you this? RUN... unless they are willing to listen to reason. Do your due diligence. In the same respect, banks aren't stupid. If you're making offers WAY too low and that are ridiculous..then that won't help you either. Be realistic, do the comps and based on the neighborhood and the work that is needed to be put into the home being brought up to value and go backwards. The trick is to make offers with agents who understand short sales. Too sad there are alot of listing agents out there who 1) don't understand them and 2) don't know how to work them.
If you come across a listing agent who does not understand this, possibly your buyer's agent MAY be able to talk them into allowing THEM to negotiate the sale for you. I've done this with listing agents that did NOT know what they were doing and allowed me to negotiate the sale so we all walked away winners and got the job done. And there are times when you just have to WALK away.



J Scott Verified Moderator Donor

Real Estate Investor from Ellicott City, Maryland

Jan 01 '12, 07:25 PM


Originally posted by Sheyenne Schultz:
Either way, the bank wins and the agent and buyer lose.

Since when does having to take a loss on a loan constitute winning? The bank loses either way -- they either take a reduced payoff or they have to foreclose and lose money on the resale.

As for the buyer, if he is slapped with a deficiency judgment -- and/or if he is hit with a tax burden on the deficiency amount -- then the best thing for him would be to sell at as high a price as possible, thus reducing future financial burden.

And as for the agent, a higher sales price results in a higher commission.

So, in actuality, the higher the short sale price, the more EVERYONE wins (or loses just a little bit less). Not to mention the little detail of fiduciary responsible that agents have to their clients.

Certainly, in a situation where the offer falls through for some reason, it will make it more difficult to get an approval for a lower price, but that's where the value of a great agent comes in; a great agent will be less likely to lose the deal and more likely to be able to negotiate a lower short sale price if the deal does fall through.



Medium_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


Tracey Williams

Real Estate Investor from Ohio

Jan 01 '12, 08:27 PM


Almost every REO I see is highest and best offer by ex -date and two weeks later the property is back on the market. Offer them your best and move on. I fall for it once and I have learnt my lesson !



Bienes Raices

Orlando, Florida

Jan 02 '12, 06:52 AM


Originally posted by Peter Giardini:
Also, other then just changing the price... which often times just encourages more back and forth in the negotiations... consider making changes to the terms of your offer. Such as increasing the EMD or removing all contingencies.

Peter, I have started doing that on REOs but since this is a short sale I assumed that the bank makes it's decision solely based on the seller's mortgage balance and what the house can actually get on the market.



Aaron R.

Bird-dogger from Atascadero, California

Jan 02 '12, 08:39 AM
1 vote


Newbie alert. New to RE investing and this forum.

I have been working with an investor who has had the "Highest and best offer" request. and it has gone both ways,
One some offers our highest and best was not the best offer the bank had and the property went to another.

I have seen the bank come back after a month or two and accept the original "lower" offer when our "highest and best" did not change from the first offer.

We have had agents come back and let us know what the declined "highest and best offers" were, and we came in 1000 higher, then got the offer accepted. So ask what the bank has for current offers, you might get some insight about the specific property.

One property we got accepted as a lower offer than others, with different terms, and a more detailed construction estimate.



Andy Hayes

Tucson, Arizona

Mar 02 '12, 07:50 PM


Originally posted by Joel Owens:
What you want is a pre-approved short sale.Someone else has already gone through the pain and anguish of submitting the offer and getting the price approved and are usually long gone when the bank gets back to them.You come in at the right time and strike a deal with the least amount of hassle.

Is the pre-approved price negotiable? Or if the numbers work, is it best to simply offer that price?

Thanks in advance.



J Scott Verified Moderator Donor

Real Estate Investor from Ellicott City, Maryland

Mar 03 '12, 12:12 PM


Originally posted by Andy Hayes:
Originally posted by Joel Owens:
What you want is a pre-approved short sale.Someone else has already gone through the pain and anguish of submitting the offer and getting the price approved and are usually long gone when the bank gets back to them.You come in at the right time and strike a deal with the least amount of hassle.

Is the pre-approved price negotiable? Or if the numbers work, is it best to simply offer that price?

You are always welcome to put in an offer below the approved short-sale price, though this will result in having to go back to the bank and renegotiate -- this can take days/weeks/months, depending on the situation and the bank.

What I'd recommend is not going back just a little bit below the approved price, as then you'll spend a lot of time and risk having the seller get a better offer; but instead either going in with the approved price (and take the quick close), or submitting an offer a good bit below the approved price (and wait it out).

That's just how I like to do it...



Medium_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


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