How Do Buyers Get the Upper Hand in Multiple Offer Scenarios?
My husband overhears a lot of real estate talk between me and my clients and colleagues. That's because we share an office. When he finally decides to get his license, he will be the smartest newbie in the area because he's been soaking up my experience for sixteen years now. The point of telling you that is to tell you the brilliant idea (which was a joke in his mind) he had for a client of a friend who keeps getting rejected, but writes strong offers. Seems she always loses when the last offer comes in and that buyer waives every contingency.
Offer deadlines are often used in these situations, but the reality of the situation is that buyers with deadlines still want to be considered if their offer was the strongest one someone had. Like a bolt of lightning, my husband said, "She ought to do a time bomb clause."
Instead of an escalation clause that needs other offers to make it higher, a time bomb clause would ideally be used as the first or second offer in. Go in at your highesty and for each day that offer is held, the lower the price goes. Give sellers a sense of urgency about taking that offer now. The more time you spend collecting offers, the less that one is worth.
It gave my friend and I a much need laugh, but it got me thinking. Obviously, this would be just as ineffective as a response deadline in an offer if the majority of agents aand their buyers were still doing business as usual. But if it caught on in the local market, can you imagine how the tables would be turned and buyers could get some control back? A seller is looking at three offers the first day, all of which go lower each day. Meanwhile, the offers starting at list or below and coming in with escalations need those offers to be at their highest for the seller to fully get the max escalation. Talk about not wanting to hold on and get over two dozen offers. Sellers would to make a deal!
Maybe not such a crazy idea after all.