BiggerPockets

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.

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 / 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.

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.

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.

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.

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.

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 !

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.

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...