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Strange strategy for winning in multiple offers

By
Real Estate Agent with Compass

Just listed a home that got 5 offers after 5 days on the market. Did we under price it? No, every offer came in within 5K of list price..well except for one.  And the comps were even lower.

You see people use Escalation Clauses sometimes to beat another offer here in Northern Virginia.  This was offer #5. He knew I had a stack of offers and I told him we were not inclinded to wait as we had some good ones.  This buyer clearly wanted the house, as they hustled to get the offer in earlier than was originally planned for them when I told the agent we wouldn't wait.

This offer came in at 5K under asking price, escalating up to 5K over. 

Huh? I literally asked the agent if it was a mistake.  If you are willing to pay 5K over, just start at list price.

It was otherwise a really good offer, but that strategy but a bad taste in the seller's mouth.

When I asked the agent why he did that, his explanation really made no sense.

In Northern Virginia, as a buyer, if you are facing 5 offers on a new listing, odds are it's going for list price or over.  Don't mess around with this strange tactic that will make the seller think you are weird and could possible cost you the house.

 

 

Jeanne Dufort
Coldwell Banker Lake Country - Madison, GA
Madison and Lake Oconee GA

I hope you helped your seller get past the "bad taste" and stay focused on the best and most likley to close offer!  If the comps are lower, yet buyers are competing and willing to pay more - that may be the strongest buyer financially.

Dec 16, 2014 11:59 PM
Adam Hamalian
Hamalian Properties Group - Lafayette, CA
Walking with you on your journey home.

When writing in a multiple offer environement, you need to come strong and with all your ducks in a row.  Why would a buyer take the odd offer when they have others they know will close.

Nice post, odd offer.

Adam

Dec 17, 2014 12:04 AM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

That was really silly of the agent. It just looks like you are playing games. In multiple offers offer at asking or a little over. I have never seen an escalation clause. In this instance they could have used it intelligently.

Dec 17, 2014 04:52 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Coral, It seems like that agent did not think that strategy all the way through. At a minimum, it was a lot to gamble on a $10,000 spread.

Dec 17, 2014 09:54 AM
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Sounds like they were trying to see what they could get.  Some people don't feel right unless they feel like they can haggle.  Foreigners do this a lot.  I have people turn down home inspections with me because I am not willing to negotiate my price. 

Dec 18, 2014 09:07 PM