We get this question quite often on our short sale listings when we explain the property has an offer in at the bank: “Can’t we make a better offer and beat the offer that is in at the bank?”
The answer is: It depends.
In Washington, we have a form 22SS, this form allows us to negotiate specific terms of the short sale. The three main terms are:
- How long the buyer/seller intend to wait (measured in days)
- Whether the buyer may walk away at any time prior to bank acceptance
- Whether the seller may accept additional offers and submit them to the bank
Item three is the trigger for this question. Ninety percent of the time buyers request that their offer be selected as the only offer submitted to the bank, and most of the time, sellers accept this term. This locks in the offer for the first offerer requiring subsequent offers to be placed into backup position. In the event the primary offerer backs out of the transaction, or the transaction falls apart, the backup offers will move into first place sequentially.
However, if it is negotiated that the seller may continue to accept offers, more than one offer can be submitted to the bank and the potential exists for a higher offer to be accepted, however the bank need not accept the highest offer. The bank can accept any offer they wish.