Put offer with escalation clause or not
Put offer with escalation clause or not
Hi Guys, I lost two battles in this bidding war in last two weeks after offering almost 10% to 15% over asking prices ( waving inspections + 30% down). Both time I had the escalation clauses.first deal I lost against the cash offer so can’t complaint. Second time I felt the seller agent sat on my offer for quite a long time before disclosing that we lost against another strong offer and didn’t even try to have negotiation. I just want to make sure is escalation clause can give advantage to seller to negotiate better with other competing offer or it’s just my luck this time. Want to be prepared for my next battle. Please advice first time home buyer also looks like my real estate agent deals more with small properties and our transaction over 1 mill will be his first or second. So seeking advice suggestion, help from seniors here!
Re: Put offer with escalation clause or not
Over the years I bought and sold more than a half dozen homes in the SF Bay area both in buyer's markets and seller's markets. Cannot emphasize the importance of an excellent realtor. When buying, in addition to getting you the best price, it is their job to sell you as the best buyer. for the property. It is also important to have a realtor with experience who also has a good reputation and is respected by other real estate agents.
Sounds like you are in a seller's market and should be represented by the best agent you can find.
Sounds like you are in a seller's market and should be represented by the best agent you can find.
- ResearchMed
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Re: Put offer with escalation clause or not
nonnie wrote: ↑Sun Jun 04, 2023 9:22 pm Over the years I bought and sold more than a half dozen homes in the SF Bay area both in buyer's markets and seller's markets. Cannot emphasize the importance of an excellent realtor. When buying, in addition to getting you the best price, it is their job to sell you as the best buyer. for the property. It is also important to have a realtor with experience who also has a good reputation and is respected by other real estate agents.
Sounds like you are in a seller's market and should be represented by the best agent you can find.
This ^^
What do you mean by "...the seller agent sat on my offer for quite a long time..."?
What was the agent you were working with doing?
This sounds like a situation where *you* need a very strong agent.
But it's not clear what happened, or what you think happened, or if it's related to an escalation clause.
RM
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Re: Put offer with escalation clause or not
nonnie wrote: ↑Sun Jun 04, 2023 9:22 pm Over the years I bought and sold more than a half dozen homes in the SF Bay area both in buyer's markets and seller's markets. Cannot emphasize the importance of an excellent realtor. When buying, in addition to getting you the best price, it is their job to sell you as the best buyer. for the property. It is also important to have a realtor with experience who also has a good reputation and is respected by other real estate agents.
Sounds like you are in a seller's market and should be represented by the best agent you can find.
I disagree with this in the OP's situation.
If OP is willing to waive inspections, then OP may as well simply contact listing agent and go through that person. Don't worry about using a buyer's agent. This way, listing agent gets twice as much commission as he/she would otherwise. This makes your offer stronger.
Re: Put offer with escalation clause or not
My agent tried reaching seller agent almost 10 times over phone and text message and finally after 24 hrs seller agent broke the news that they went with other higher offer. Not sure. Should we included date time in the offer in case of best offer time also? Are the sellers agent bound to respond by specific time to buyer brokers?
I just want myself to be prepared for next offer.
I just want myself to be prepared for next offer.
ResearchMed wrote: ↑Sun Jun 04, 2023 10:03 pmnonnie wrote: ↑Sun Jun 04, 2023 9:22 pm Over the years I bought and sold more than a half dozen homes in the SF Bay area both in buyer's markets and seller's markets. Cannot emphasize the importance of an excellent realtor. When buying, in addition to getting you the best price, it is their job to sell you as the best buyer. for the property. It is also important to have a realtor with experience who also has a good reputation and is respected by other real estate agents.
Sounds like you are in a seller's market and should be represented by the best agent you can find.
This ^^
What do you mean by "...the seller agent sat on my offer for quite a long time..."?
What was the agent you were working with doing?
This sounds like a situation where *you* need a very strong agent.
But it's not clear what happened, or what you think happened, or if it's related to an escalation clause.
RM
- quantAndHold
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Re: Put offer with escalation clause or not
As someone who has been a seller in a situation like this, no. I want my agent to represent *me*, and I want my buyer to have a high quality agent of their own. I want the deal to go smoothly, and I don’t want my agent to be doing double duty trying to represent us both.Clemblack wrote: ↑Sun Jun 04, 2023 10:12 pmnonnie wrote: ↑Sun Jun 04, 2023 9:22 pm Over the years I bought and sold more than a half dozen homes in the SF Bay area both in buyer's markets and seller's markets. Cannot emphasize the importance of an excellent realtor. When buying, in addition to getting you the best price, it is their job to sell you as the best buyer. for the property. It is also important to have a realtor with experience who also has a good reputation and is respected by other real estate agents.
Sounds like you are in a seller's market and should be represented by the best agent you can find.
I disagree with this in the OP's situation.
If OP is willing to waive inspections, then OP may as well simply contact listing agent and go through that person. Don't worry about using a buyer's agent. This way, listing agent gets twice as much commission as he/she would otherwise. This makes your offer stronger.
Re: Put offer with escalation clause or not
We are currently in contract to sell our home and our listing agent is also representing the buyer (just worked out that way). Not only is this saving us some money on the commission, more importantly the agent has roughly twice as much incentive to make sure the deal gets done. As a seller, that gives me additional comfort the transaction will close. While I agree that it feels a bit odd (how can one agent represent the interest of two people simultaneously), I am not opposed to it.quantAndHold wrote: ↑Mon Jun 05, 2023 12:16 amAs someone who has been a seller in a situation like this, no. I want my agent to represent *me*, and I want my buyer to have a high quality agent of their own. I want the deal to go smoothly, and I don’t want my agent to be doing double duty trying to represent us both.Clemblack wrote: ↑Sun Jun 04, 2023 10:12 pmnonnie wrote: ↑Sun Jun 04, 2023 9:22 pm Over the years I bought and sold more than a half dozen homes in the SF Bay area both in buyer's markets and seller's markets. Cannot emphasize the importance of an excellent realtor. When buying, in addition to getting you the best price, it is their job to sell you as the best buyer. for the property. It is also important to have a realtor with experience who also has a good reputation and is respected by other real estate agents.
Sounds like you are in a seller's market and should be represented by the best agent you can find.
I disagree with this in the OP's situation.
If OP is willing to waive inspections, then OP may as well simply contact listing agent and go through that person. Don't worry about using a buyer's agent. This way, listing agent gets twice as much commission as he/she would otherwise. This makes your offer stronger.
Real Knowledge Comes Only From Experience
- Jimbo Moneybags
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Re: Put offer with escalation clause or not
Houses in the US are a dime a dozen. Don't get lured into the "this is my perfect forever home" trap. Thinking like that makes you a desperate buyer and you are more prone to make unwise decisions, like waiving inspections and other contingencies and offering escalation clauses, and you are likely to overpay.
When you see a house for sale that meets your needs, put in your best offer with appropriate contingencies. If your offer is the seller's best offer, you'll have a deal. If not, move on. You WILL find another house that meets your needs if you are patient and the exercise of that patience will payoff in the long-run.
When you see a house for sale that meets your needs, put in your best offer with appropriate contingencies. If your offer is the seller's best offer, you'll have a deal. If not, move on. You WILL find another house that meets your needs if you are patient and the exercise of that patience will payoff in the long-run.
Re: Put offer with escalation clause or not
The above ^^^^ is the correct answer. Any dreams, fantasies or other magical experiences a buyer projects upon a new home will fade. It’s the money - right property, right location and right price.Jimbo Moneybags wrote: ↑Mon Jun 05, 2023 7:26 am Houses in the US are a dime a dozen. Don't get lured into the "this is my perfect forever home" trap. Thinking like that makes you a desperate buyer and you are more prone to make unwise decisions, like waiving inspections and other contingencies and offering escalation clauses, and you are likely to overpay.
When you see a house for sale that meets your needs, put in your best offer with appropriate contingencies. If your offer is the seller's best offer, you'll have a deal. If not, move on. You WILL find another house that meets your needs if you are patient and the exercise of that patience will payoff in the long-run.
Re: Put offer with escalation clause or not
The broker has to advise the seller of the offer. The ball is then in the seller's court.ps2me11 wrote: ↑Sun Jun 04, 2023 11:10 pm My agent tried reaching seller agent almost 10 times over phone and text message and finally after 24 hrs seller agent broke the news that they went with other higher offer. Not sure. Should we included date time in the offer in case of best offer time also? Are the sellers agent bound to respond by specific time to buyer brokers?
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Re: Put offer with escalation clause or not
The seller's agent has a fiduciary duty to present all offers in a timely matter. What can happen, though, is an offer such as yours can come in and be used for leverage by the seller's agent. While the seller's agent cannot legally tell another buyer's agent exactly what your offer is, they can easily suggest how high an offer has to be.
This is another area where it pays to have an agent who is a good negotiator and is well respected by other agents, who has good contacts with other agents. Information is not always shared equally among agents.
This is another area where it pays to have an agent who is a good negotiator and is well respected by other agents, who has good contacts with other agents. Information is not always shared equally among agents.
Re: Put offer with escalation clause or not
When buying, you do want to have a strong and aggressive buyer agent.
However it is also equally important that you trust your agent that are not trying to sell a house that you don’t need.
I agree with others that don’t chase that you need to buy a house next week or next month. You want to buy the house that you want.
We had a similar to yours. Pre pandemic. We looked at house , had the full asking price offer in that same day. Only to learn after 24 hours that offer has not been presented to the seller. The seller agent will present all offers after the weekend. Later, we learn that buyer accepted an offer. Same full asking price , but 1 week early closing and the buyer is from same agency as the seller.
However in the end we bought a house which had a better location just across the street from the first house.
Is there new construction going on where you are looking to purchase? If yes look at those as well.
However it is also equally important that you trust your agent that are not trying to sell a house that you don’t need.
I agree with others that don’t chase that you need to buy a house next week or next month. You want to buy the house that you want.
We had a similar to yours. Pre pandemic. We looked at house , had the full asking price offer in that same day. Only to learn after 24 hours that offer has not been presented to the seller. The seller agent will present all offers after the weekend. Later, we learn that buyer accepted an offer. Same full asking price , but 1 week early closing and the buyer is from same agency as the seller.
However in the end we bought a house which had a better location just across the street from the first house.
Is there new construction going on where you are looking to purchase? If yes look at those as well.