This is a common situation on Bank owned foreclosure properties. We are often seeing 8-10 offers on a home, keep in mind many buyers don't even put pen to paper when they find out they are in a multiple offer situation!
Often we are seeing the price being driven up past appraised value so make sure you are receiving sound advice from your buyers agent! Many banks will have a clause stating the buyer will bring the difference to closing if the home does not appraise
For example a home is "bid up" to $210,000 but the appraisal comes in at $200,000 for your loan. This means if your lender is financing 95% of the appraise value they will only lend you $190,000 - that means you bring the $10,000 down payment AND the $10,000 difference in sales price to appraised value for a new total down payment of $20,000 - not a surprise many buyers would like
If there are multiple offers, the bank will typically verbally counter all with “highest and best”. This means come back with all that you have got and the bank will choose at that point. The REO seller will likely not counter after that. PLEASE read the multiple offer notification completely and be sure you understand ALL terms. I always advise to make the offer high enough that you will “know” that you could not go any higher if you lose the property. There will be no second chance when there are multiple offers.
Call us at 843-224-7007 for expert home buying representation!