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Um, what potential problems would there be? We did an escalation on our first house, and it's what allowed us to get it.
This was our first offer on buying a house, and only the third house we had seen in person. (We had been looking for months and months online and this was the first house we both loved). We had done research into offers and contingencies, but we weren't expecting to get into a bidding war, so we just trusted our Realtor.
I guess I thought the Realtor would really try and get the house since their pay is based on. Live and Learn, at least it just cost us time.
What part of "best and highest" is unclear? It's not your agents fault if you didn't offer your "best and highest" when asked for it. Escalation clauses have their own problems. Would you close if your escalation clause put you $25,000 over asking or would you be thinking the agents collaborated with a bogus offer to drive yours up?
The most likely scenario is that the seller wisely preferred cash over financing. If the other offer was cash, as a seller, I would have taken it even if this one was $1000 higher. I see too many loans fail to close or have to get extensions rather than close on the original close date. As a seller, it's not worth the hassle or risk of accepting a financing contingent offer unless the difference in price is substantial.
This was our first offer on buying a house, and only the third house we had seen in person. (We had been looking for months and months online and this was the first house we both loved). We had done research into offers and contingencies, but we weren't expecting to get into a bidding war, so we just trusted our Realtor.
I guess I thought the Realtor would really try and get the house since their pay is based on. Live and Learn, at least it just cost us time.
It is easy as an agent to think people are under-bidding, but dangerous territory to tell them to increase their offer.
The next thing we can expect to hear: "We were already $10,000 over list price, and our agent pressed us to offer more."
If the market dynamics, recent comparable closings, market trends, all supported your offer as reasonable regardless of list price, you just got outbid.
It happens.
Fishy stuff also happens, but nearly all the time we just see that someone else put a little more money on the table.
And, Cash is King.
So what happens if two buyers put an escalation clause in with their offer? The price would rise into the stratosphere until no mortgage would be willing to fund it. Seems to me that they should not be allowed.
So what happens if two buyers put an escalation clause in with their offer? The price would rise into the stratosphere until no mortgage would be willing to fund it. Seems to me that they should not be allowed.
I saw one escalation offer 9 years ago. Scribbled in the margin of our standard Offer to Purchase.
They are strongly discouraged in NC by the RE Commission and the NCAR Legal Beagles, and as we don't have standard forms provided, would have to be drafted by an attorney.
18 months ago, I went to an NCAR Legal seminar where they were discussed in depth, and the details escape me right now, but trust and chicanery were two topics touched on.
What part of "best and highest" is unclear? It's not your agents fault if you didn't offer your "best and highest" when asked for it. Escalation clauses have their own problems. Would you close if your escalation clause put you $25,000 over asking or would you be thinking the agents collaborated with a bogus offer to drive yours up?
The most likely scenario is that the seller wisely preferred cash over financing. If the other offer was cash, as a seller, I would have taken it even if this one was $1000 higher. I see too many loans fail to close or have to get extensions rather than close on the original close date. As a seller, it's not worth the hassle or risk of accepting a financing contingent offer unless the difference in price is substantial.
Nothing about "being told to put your best foot forward" is unclear, but they other buyer's best was 100$ more than our offer, and ours was supposedly submitted after. They were probably just lucky/wise enough to offer 10100 over list on a house they were told only had one offer on.
It looks like it was sold to a buyer whose agent works in the same agency as the listing agent. I also agree cash is king, so how long does it take to close a cash deal, just over a month? I am just wondering. We are closing in 21 days on the house we did end up with. That was conventional financing though. I also understand it takes a little while for the MLS to update.
I learned a lesson, make sure you have a good Realtor/pick one in the same agency as the house you really like, or skip Realtors and buy FSBO.
Nothing about "being told to put your best foot forward" is unclear, but they other buyer's best was 100$ more than our offer, and ours was supposedly submitted after. They were probably just lucky/wise enough to offer 10100 over list on a house they were told only had one offer on.
I think there was an escalation clause involved by that buyer so it didn't matter when you offered. They would automatically outbid you. Kind of like how you place a bid on ebay and the system continues to bid up for you until you hit the cap even if people enter a bid after you.
Quote:
Originally Posted by jpbumich
I learned a lesson, make sure you have a good Realtor/pick one in the same agency as the house you really like, or skip Realtors and buy FSBO.
No. Take the time to interview buyer agents so you aren't hiring the first person that answers the phone to write an offer. Being within the same agency has nothing to do with anything. Your agent didn't explain the options to you in negotiating during multiple offers.
Different states use different terms. I have not seen the term "escalation" before. In Maine they call it a kickout clause.
Out here a kickout clause is a clause used for home sale contingencies. Escalation clauses are totally different.
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