Real Estate Broker/Owner with Bill Desai Real Estate Services, Ontario, CA Lic. #01029863


In California the buyers are getting another state tax credit up to $10,000 (that will last for a very short period) on top of the federal tax credit. This credit has created a bidding war in a smaller price range of properties of under $500,000 and we have multiple offers situations.

One of my clients is buying a retirement home. We are making an all cash offer at or above listing price. We have already made several offers and so far all of them have been out bid by other offers. This weekend we made an offer at listing price and while we are waiting for an answer from the seller this client asked me if we should raise our offer, if yes, how much should I offer. I said that it all depends on how much you like the home. Can you see yourself in this home being happy after a few years down the road. Does it meet your requirements now and will it meet your requirements for several years down the road as well. I would like you to be happy for years to come. And if you are thinking to raise the offer just for the reason of the tax credit then do not raise the offer. It's all about how much you like the home, not about how much it costs or how much you will save (on Tax/Tax credit). After they said that they really like the house, we have raised our offer and we will see what happens.

As an agent, when someone asks us how much should I offer, I do not think one should advise if the buyer/seller should offer/ask higher or lower or an exact amount. If you do... and appraisal comes in lower, or before escrow closes the market changes, or interest rates change, or prices goes up or down, then what happens?  If you direct them one way or the other and if you are right... everything is fine and dandy, but say your opinion turned out to be wrong... guess who is going to be blamed. Our job is to educate the buyers and sellers of the current market condition and current value and let them make the decision.

The bottom line is that our answer to a question of how much should I offer or how much price should I ask or should I buy now or should I wait, especially for an owner occupant, the answer I prefer is that the decision to buy or sell now or wait for a better price is yours.  I would give them the facts of the current market. The decision should not be based on tax credit alone. If your decision is based on FEAR or GREED, chances are it will be wrong. Decisions made influenced by EMOTIONS or under PRESSURE hardly ever turn out to be right decisions.

Logo Bill Desai Real Estate ServicesWhen working with an investor client is a subject of another topic alltogether. Investors do not make decisions on emotions. For investor its all about profit and loss and ROI (Return on Investment).

If you are looking to buy or sell in Inland Empire or San Gabriel Valley Area of Southern California I will be more than happy to assist you. Please call or email. Phone: (909)615-9769 or

Bill Desai, Realtor®/Broker, GRI, e-PRO, SFR.


Comments (5)

Mike Wong
Keller Williams Realty Southwest - Sugar Land, TX
Realtor: Commercial, Residential, Leasing, Invest

I get that question with every buyer, its the nature of our business. I provide the comps, information, current market snapshot and analysis and allow the buyer to fill out their own check. Every buyer is different with different motivations.

We provide all the information so that they can make an informed decision. Whats challenging is when they see my results on both sides. My sellers get the highest prices and my buyers get the best deals when they listen to the prices I advise.

Apr 19, 2010 04:43 PM
Don Spera
CR Property Group, LLC - East York, PA
Serving York and Adams County, PA

Bill,  In our area we use as needed "escalation clauses".  I am not sure if you have this type of document in your files.  Not to treat you elementary, it is a document that will allow you to outbid a competitive offer to yours by X amount of dollars up to a certain price cap.

Example:  A house is listed at $250,000.  Mr. & Mrs. Buyer would really like to pay $245,000 for it but they are willing to pay up to $260,000 for it.  They offer $245,000 and use an ESCALATION CLAUSE that says something like this, "In the event of a competing offer the buyers will pay $1000 over the highest offer's net up to a purchase price of $260,000.  In the event of an escalation, seller to provide proof of competing purchase contract.  Seller represents and warrants that competing offers are true and valid offers."

This may help you solidify more sales.  Best wishes.

Apr 19, 2010 05:40 PM
Bill Desai
Bill Desai Real Estate Services, Ontario, CA Lic. #01029863 - Ontario, CA

Hi Don,

The ESCALATION CLAUSE sounds like a great idea but we do not have this pre-printed on our RPA form nor have I heard of anyone using it. So I don't know if this has been tried out in our area before or not. But as with any other contingencies I think one could use this Escalation Clause as well. However, I have a question... what if the seller gets two or more offer with the same escalation clause... where does it end. Most likely it will go to the max amount mentioned in each purchase offer and the highest offer will get it. I think I just answered my own question. This clause sounds like a sealed auction but if the buyer really wants the house it can work. Thanks for the idea. I would discuss this with other friends and will think about trying it out. Hopefully it will work or better yet one of the offers will get accepted. I would be interested in learning more about this. Thanks again.

Apr 20, 2010 12:46 PM
Irene Tron
Valparaiso, IN

I think I'd be cautious about stating an actual number for the offer.  Giving them information such as comps in the area that they needed to make a educated offer is the best choice to protect yourself.

Apr 28, 2010 07:34 AM
Richard Weeks
Dallas, TX

The Texas Real Estate Commission has advised Texas agents that esculation clauses are not to be used.

Oct 19, 2013 11:37 PM