short sale question about disclosing offers

[Trudy Smit]

Can someone shed some light on what is the CA rule or protocol in the following Short sale scenario?:

Buyer 1 has an executed contract for $380,000, meaning Seller accepted the offer and offer is being presented to the bank for $380,000, subject to bank approval.

About 2 weeks after, but still before Bank has approved or declined Buyer #1's offer, another all cash offer comes in for 400,000 by Buyer 2.

Understand that seller can only accept 1 offer and the offer by buyer 2 becomes a back up offer, but question is:

Does the short sale listing broker inform the bank that there is a higher back up offer or is that not disclosed to the lender. Is there a DRE rule or requirement that creates a uniform practice in this situation? What the standard here? Thanks in advance

[Wayne Brooks]

Ron, you're absolutely correct. But, the question isn't whether to forward additional offers to the Seller, but to the Bank.