How Do Buyers Get the Upper Hand in Multiple Offer Scenarios?

By
Real Estate Agent with Long and Foster REALTORS®, Gainesville, VA VA License # 0225089470

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.  

 

Comments (7)

Joseph Domino 480-390-6011
HomeSmart - Scottsdale, AZ
Real Estate Made Easy

Well it certainly is a unique idea. I will have to add this idea to my arsenal.

Feb 14, 2021 10:58 AM
Chris Ann Cleland

Can't hurt to try something new.

Feb 14, 2021 07:13 PM
Andrea Bedard
Thompson Company, REALTORS® 240.593.2860 - Silver Spring, MD
Fluent in German and Real Estate * M.A. ABR ASP

Maybe not a crazy thought Chris Ann! In this market it certainly takes a different approach to stand out. I can see it working very well as long as the buyer's financing (or cash) is rock solid. 

I'm always blown away how many sloppily written offers, or offers with shaky financing are still being submitted. Yeah... no. That won't work in 2021. 

Feb 14, 2021 11:59 AM
Chris Ann Cleland

It would have to be a solid offer for sure.  There's been a lot of brainstorming around our office about how to get a buyer under contract and from the list side, minimize buyer's remorse.  There's so much frenzy that people are making crazy decisions.

Feb 14, 2021 07:15 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good afternoon Chris Ann Cleland ,

May be a great idea to try..what do you have to lose? You would certainly get the attention of the sellers!

Feb 14, 2021 12:14 PM
Chris Ann Cleland

That's what I think.

Feb 14, 2021 07:15 PM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Hello Chris Ann Cleland -  I read something similar the other day ... they referred to it as a de-escalation clause. 

It might work in some markets yet doubtful in a hot highly competitive seller's market ... 

Feb 14, 2021 01:28 PM
Chris Ann Cleland

I read about that de-escalation clause on Scott Godzyk's post.  Didn't have a great outcome in his market, but if you did it with the right buyer, it might.  And you'd have to be well over list price to make it work.

Feb 14, 2021 07:16 PM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Chris Ann - as Kathleen Daniels, Probate & Trust Specialist commented Scott Godzyk mentioned the clause recently.  Out-of-the-box thinking is alive.   Successfully?  Well, that's another story. . .  

Feb 14, 2021 04:33 PM
Chris Ann Cleland

Sounds like it was a failure for the gentlemen Scott Godzyk referenced.

Feb 14, 2021 07:17 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

There are a lot of people that play the numbers like the lottery but they definitely need to be a lot more strategic and what you’re saying says a lot to that.

Feb 15, 2021 08:50 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Out of the box thinking is still alive and well and sometimes you have to make your own box I find. Michael Jacobs

Feb 15, 2021 08:51 PM

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