Here in Arizona the competition for a Short Sale can be fierce. The demand for low cost properties can create a multiple offer situation. When representing the Seller, there have been 2 philosophies on how to manage multiple offers on a property.
First, the Seller accepts the highest and best offer and only that offer is presented to the bank. All other offers are held in back-up position until the current Buyer withdraws, Buyer's offer is rejected by the bank, Buyer rejects bank's counter-offer or Buyer fails to qualify for financing. In the case where a higher offer comes in after the original offer is presented to the bank, the higher offer is held by the Seller and remains in back-up positon until current Buyer is nullified for any of the previously mentioned reasons.
Second, the Seller continues to accept offers and turns all offers into the bank for acceptance or rejection. A higher offer is submitted on grounds that the bank will cancel a lower offer without further notice.
The AAR Exclusive Right to Sell (Listing Contract) and the Short Sale Addendum to the Listing Contract can be interpreted to allow for either approach to handling Short Sale multiple offers.
I have found in order to keep the playing field fair, I am in favor of escrow being opened at the time of Seller acceptance as insurance for both Buyer and Seller to successfully close the sale.
Please share your experiences with both approaches. I would like to weigh out the pros and cons of both to help determine the most affective. Thank you in advance.