However, for the listing agents actively involved with them, I discovered a better way to get the highest offer for the lender quickly.
I've seen lots of different strategies, but an open/online bidding process seems to be one of the best options out there today. The process puts a deadline on submitting offers (like HUD homes) but it keeps a fair playing field for all buyers by letting them know the current bid price. This can actually drive up the price and create a heated bidding war as it ends. At completion, the high bid also comes with all the bid history to help substantiate a "fair market value" for the lender.
Here is a simple overview of the process...
- The property is marketed using an online bidding platform (in coordination with the MLS) for as little as 1 week. It includes holding at least 1 open house preview, preferably 2. In the auction terms it MUST be clear that the high bid is subject to lenders approval. The online auction makes it simple for buyers and their agents to submit offers and it's all automated (No more juggling multiple offers and all the paperwork involved).
- When it ends, the high bid is written up as an offer and presented to the lender. In addition, the agent also explains to the lender how the property was marketed through an online bidding process, and they provide stats such as number of people who visited the property, number of bids, number of people bidding, etc. This will help the lender realize the highest bid is "fair market value".
- The short sale process is managed as normal, but the agent can also follow-up with the non-winning bidders and sell them other properties.
I recently worked with a RE/MAX agent to use this process in St. Louis. The property being sold was not a short sale situation when he took the listing, but after several months of not being able to sell it, the sellers situation changed.
He was able to use the process to get several buyers interested in it by starting low and having them bid online. When it was over he brought the highest offer to the lender (a local lender) and they felt the process got them a fair price so they approved the short sale and it closed in about 6 weeks.
The agent, seller, lender and buyer were all happy with the results. A win-win-win-win.