Special offer

Have you ever heard of a DE-ESCALATION Clause?

By
Real Estate Broker/Owner with Godzyk Real Estate Services NH License 033394

You may first be asking what is a DE - Escalation Clause? I was not even sure this was a thing until this cash buyer called. He asked for my assistance in buying a home. We met and he he told me if he hired me, we had to use "his plan" to  purchase a Manchester New Hampshire area home.

 

His plan was to offer more than the asking price. A cash offer with no contingencies. The kicker is that the seller has 1 hour to accept. 

 

If the seller did not accept in an hour, his offer reduces by the $40,000 he added to the asking price. 

 

If the seller does not accept in 2 hours. He wants to withdraw his offer and make one on another property. He said he is sick of the games.  Sick of delays and sick of waiting 7 days for sellers to answer offers. 

 

As i pondered his request, he told me he had another buyer agent who refused to write this offer on another home he had liked. He fired them. He got on FB and asked his friends which agent in the Manchester area would give him great service. Many referred me and that is who he chose. So on his plan, it was aggressive, but beneficial to a seller who wants a great offer quick. 

 

Our story starts a couple weeks back. We found a home he fell in love with. Sure enough the agent said they would not accept offers for 7 days before deciding. We saw the home, wrote the offer and presented it. One hour went by and the agent refused to present it early. Sure enough after 2 hours my buyer signed a withdrawal of the offer. 

 

I knew of another home owner in that neighborhood that was thinking of selling later in the spring. The home owner invited us to see the home. He loved it. The home owner though, did not want to close until Spring. It was actually only about 8 weeks away back then.  He made an offer and the seller jumped on it. We had a very happy buyer and seller.

 

Fast forward a week and the seller of the first home was talking to the seller of this new home. The seller told my seller he got full price. Now the buyer had told the new seller the story. SO when the new seller told the first seller, they were beyond upset. They never told the agent to hold offers for a week. The agent told them that was how "they do it". That seller lost $40,000 by his choice of who to list with. He was taking it up with his agent. 

 

The moral of the story is that it is important that every Buyer or Seller should not just choose any agent, choose the BEST agent for the job. Having an agent that works for you is a must. 

 

My philosophy is simple, provide more personal and professional service to guide my clients through each step of the buying or selling process. All Agents are not created equal and every buyer or seller should take the time to hire the BEST not just the biggest. Those that hire me, find a dedication like no other.

 

Comments(42)

Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

It is a shame Kathleen Daniels, Probate & Trust Specialist 

Feb 14, 2021 06:06 AM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Lets here it Chris Ann Cleland 

Feb 14, 2021 06:06 AM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

I agree Anna Banana Kruchten CRS CRB, Phoenix Broker and that is what i tell my sellers before we start showing the home. 

Feb 14, 2021 06:08 AM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

When I was in NY deadlines for offers were unheard of. Here they are the norm. A one hour deadline would still make quite the statement!

Feb 14, 2021 07:50 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Scott Godzyk ,

Such a shame this seller lost out because the agent made up their own game rules. Selling a home is a team effort and the seller needs to be included on all decisions on marketing their home. It's an agents job to educate sellers, show them the options and come up with a plan that the seller understands and feels is the best way to market their home and handle offers.

Feb 14, 2021 08:26 AM
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

I enjoyed this concept and I can see the merit to your buyers plan of attack. In our MLS the clause that states we will review all offers on this date also states that the seller reserves the right to accept another offer earlier Scott Godzyk 

Feb 14, 2021 08:38 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

I couldn't tag you in the post, but just got done writing it.  Here you go.

Feb 14, 2021 09:41 AM
Hella M. Rothwell, Broker/Realtor®
Carmel by the Sea, CA
Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea

Our market has so little inventory and, just this morning, I saw a home that just came on the market on 2/10/21 and it said " seller will not review offers before Monday, 02/15/2021".  However, that doesn't mean the seller won't get to know what's coming in and change the game plan, I would think. 

Feb 14, 2021 12:37 PM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Scott Godzyk Love this story. Was just telling a similar story the other day where an agent never presented an offer- Good for you glad you switched and sold 

Feb 14, 2021 01:52 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Scott:

I suspect we are all seeing more creativity around offers with the limited inventory, and perhaps more bad behavior, too, as frustrations set in and people are doing whatever they can to have a favorable outcome.

Jeff

Feb 14, 2021 05:51 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

somewhere along the lines Agents need to remember they are not the Principals, they are facilitators... if this happened in California the seller would have taken legal recourse to the brokerage and the agent.... and it would have more than likely paid the difference... i.e.: $40k or more, Endre

Feb 14, 2021 10:01 PM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

that is a fascinating approach - your buyer may be on to something to shake things a little loose

Feb 15, 2021 05:43 AM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

Something got lost for me in the story other than one seller did not tell their LA to wait 7 days. Not working for your client.

I think your buyer wants it his way or the highway which he got on a few occasions. 

Feb 15, 2021 07:30 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Scott Godzyk - I have not had anyone use this but I can see how it may be beneficial. 

Feb 15, 2021 12:25 PM
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

I have had clients use this approach but we give the seller more time.

There is a local broker here in Boise that I am going to report since I have tried for 9 days to reach him on new listing.  I have emailed, called & text and no response at all. 

Feb 16, 2021 06:00 AM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

I've not heard of a de-escalation clause.  Also, in this market sellers do not wait 7 days before considering offers.  I can see why that would frustrate a buyer.  Kudos to your buyer for trying to turn the situation to his advantage!

What happens often here is the house comes on the market on a Thursday, seller allows 15 minute viewings only, then there is an offer deadline 24 hours after listing.  Quite often there will be 10, 15, 25 offers on a house.

Feb 16, 2021 12:35 PM
M.C. Dwyer

Wow that's crazier than here!    Here they'll often put it on for a weekend at least, 30 minute showings, and then get the same number of offers as your area.

Feb 16, 2021 01:47 PM
M.C. Dwyer
Melody Russell Team at eXp Realty of California, Inc. - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

Sounds like that agent didn't have written permission to withhold offers from them.     Not terribly bright!

Feb 16, 2021 01:42 PM
Kimo Jarrett
Cyber Properties - Huntington Beach, CA
Pro Lifestyle Solutions

I had an investor who had his offers auto invalid if not accepted within 24 hours. He would always pay full price or more depending on the property and surprisingly most of his offers were automatically withdrawn.

Sellers may not have known about our offers since it was made to the sellers agent and they had not given the offer to their client. So, this strategy is aka a deescalation clause;  I just learned the terminology in the Rain!

Feb 17, 2021 01:57 AM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

That buyer had a great plan, he just needed the right agent!  Interesting story in today's "escalating" market! 

Feb 25, 2021 01:56 PM
Kris Collis, Associate Broker
Smart Way America Realty - East Stroudsburg, PA
Professional Results you Expect 570-801-5525

Oh dear.  An agent actually saying, "that's how we do things."  That's one agent who forgot who is working for whom. Hope they learned their lesson.

Mar 01, 2021 09:24 PM