So, I put in an offer on a short sale for about 24k less than the list price, which was approved by the homeowner and sent on to the bank. The property also has something called a 'short sale facilitator' on the books as involved and taking part of the commission... My RE agent says they help move paperwork through the bank...

Now from my own reading and research, I'm not expecting this stage to have a speedy turn around, even with the 'facilitator'... But I noticed today that the property just announced an open house for tomorrow afternoon! Of course I'd rather they didn't, as I really rather like this house, and with the market still dropping, under list is the only way to make it worth while. So the last thing *I* want is to have to bid against someone else.

Anyone have an insights on what might be going on here? Is my offer more or less likely to be accepted because I see them making this move? (More likely, if this is a last ditch effort to garner interest before they take my low bid, or less, because now I'm likely to have more competition seeing the property).

*sigh*

No expert here but I believe the home owner has absolutely no say in this at all. So not sure about the "approved by home owner" part. Also I believe the bank has nothing to do with how the house is shown. Sounds like the LA and this "facilitator" are holding out for a better offer. If that’s true the facilitator is one more layer of BS in an already slow process.

Then again I believe it’s normal to continue to show until an actual contract is in play.

Dirtfox-

At this point, you might as well continue looking at other properties. Unless the property has been priced high to begin with, or has been sitting for over a month without any activity, chances are, 24k under the asking price probably won't cut it. I'm not sure which market you're looking in, but I've been searching since last August working with Redfin on REOs and working with a local agent on Short Sales. I've put in over a handful of offers, ranging for 10k below to 10k over, without much success. If the property was actually priced right to hit the market, most of these properties sell within a couple of weeks and generally over the asking price.

My recommendation is, if you really like the property, simply put your best foot forward. Offer a little bit more, and ask for some kind of reduction during contingency by leveraging your termite/property inspections. Just my 2 cents.

Thanks for all the comments. It's a good point to keep in mind that, much as I feel personally attached, there is no contract yet that gives me any hold on the situation.

To give you all a bit more background, however... I'm looking on the Monterey Penninsula (So sadly outside Redfin's area and most every one else's expertise) This house has been on the market 144 days. Went on back in October and has had tiny incremental price drops once or twice a month since then. They keep just staying too high ahead of the curve of prices declining, and until recently, tenants had been still living there, making it hard to show and really something of a mess.

Myself, I've actually put offers on three houses before this. Withdrew one myself when I saw how the market was dropping, and was outbid on two of them by all-cash investment buyers. (grr, I want somewhere to live!)  Those went just like you describe JC - priced a bit under the market, got a lot of action really fast, and sold quickly and for decently over asking price. Since this house needed some maintenance (broken windows, terrible interior design) and shows poorly with all the crap from the tenants, I hoped I might dodge the attention of competitors and sneak away with a big house on a big lot with a great overall layout.

Open house means they probably cleaned up, and people might look more closely, curses!

But yes, I'm still looking at other properties.  Buyers could probably accept an offer 100k below and not care, since it doesn't affect the money in their pocket

I'm a bit worried now about the comment about the 'short sale facilitators'. Anyone else had experience with those? RE agent says they're supposed to help speed things up, not be another layer of crap in the Short Sale process...

I would take my time and not rush into anything right now. As another poster told me in another thread- be careful about some of the advice you get on these forums. We have RA's trolling here and trying everything they can to save their livelihood and get people to buy RIGHT NOW at the HIGHEST PRICE.

As stated in previous entry - it is a hard time right now to buy a house in the Bay area, b/c Real Estate Agents are trying anything and everything to prop up the home prices. Just look at the spread between asking price and selling price in the price per square foot graphs and you can see there is some serious manipulation going on.

A 20% drop in home prices is a 20% drop in their salary (that also includes your buyers agent). It is hard to be honest when a person see that much income evaporating befor their eyes.

Your very best bet is to steer clear for a while, maybe a few months, until the buying and asking prices come somewhat in line. That will be a good indicator that some honesty has returned... But I know the hard part is can you stand to wait. I hope you can. Good luck sir.

The homeowner does have a say in the short sale.  The owner will receive a 1099 for the loss of the bank - it's attributed to the owner/seller as debt forgiveness.

The best chance of success is for the owner to get prior approval for a specific short sale amount - prior to listing the property.  An offer for that amount should seal the deal. 

I believe there are some tax waivers for mortgate debt cancellation right now:

http://www.irs.gov/newsroom/article/0,,id=174034,00.html

Here's what I have learned about short sales so far, and by no means am I an expert.

The LA initiates it as a short sale, not the owner or the lender. You can call the lender and tell them you are trying a short sale but that's the end of it. There is no such thing as a pre approved short sale. A lender won't even consider it until you have a buyer with an offer. Then and only then do they even begin to look at anything. This is why it takes so long to process because they don't start until there is a buyer with an offer.

If anybody wants to add or correct me feel free.