Do the Short Sale Banks know we're having a bidding war?

Good question!  Todays market has changed drastically year over year.  We are also seeing bidding wars on REOs that are priced to sell and move in ready.  I just returned a counter offer today after being out-bid on 3 others!  No one is writing this news yet.  But they will soon.

On REOs, the banks would know that there's a bidding war because the listing agent is obligated to present them with all offers. But on short sales, it's highly likely the bank doesn't know about backup or additional offers. Since the bank isn't a party to the listing agreement or the contract, the listing agent isn't obligated to let the bank know about all offers. Certainly, it can be frustrating for buyers to be out-bid, but price isn't always the deciding factor when choosing an offer to submit for short sale approval. On our short sale listings, we also look at the flexibility and commitment of the buyer, the experience of the buyer's agent, and the financing, down payment & credit of the buyer. When I'm on the listing side of a short sale and we have a bidding war, I don't believe it's always in the seller's best interest to take the highest offer. I'm always looking for an offer from a buyer who has good credit and is willing to wait a long time and offers a price that I feel confident will be supported by an appraisal.