Escalation Clauses- Bidding wars

[Anonymous]

Any real estate agents willing to give an honest assessment of using escalation clause in submitting an offer. As a buyer I wonder how often, listing agents create fake contracts in order to trigger a real buyer’s escalation clause? Or how often listing agents falsely tell potential buyers that there are other offers higher than theirs in order to generate higher bids?

[Anonymous]

Not a realtor but a buyer who looked into escalation clauses. I think the seller has to produce the offer at some point? Some listing agents just ask for best and final offers but I think they do go back to some buyers and negotiate price if they like their terms.

[Anonymous]

Anonymous wrote:Not a realtor but a buyer who looked into escalation clauses. I think the seller has to produce the offer at some point? Some listing agents just ask for best and final offers but I think they do go back to some buyers and negotiate price if they like their terms.

I’ve never seen the other offer.

When we sold our house it was obvious that the agents made sure to get another offer to trigger the escalation clause.

[Anonymous]

Anonymous wrote:Not a realtor but a buyer who looked into escalation clauses. I think the seller has to produce the offer at some point? Some listing agents just ask for best and final offers but I think they do go back to some buyers and negotiate price if they like their terms.

Sellers can get someone to write a fake offer to trigger an escalation clause. Asking for it to be produced doesn't protect against this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not a realtor but a buyer who looked into escalation clauses. I think the seller has to produce the offer at some point? Some listing agents just ask for best and final offers but I think they do go back to some buyers and negotiate price if they like their terms.

Sellers can get someone to write a fake offer to trigger an escalation clause. Asking for it to be produced doesn't protect against this.

That's incredibly paranoid.

[Anonymous]

So you think they are committing fraud while also risking that "the real buyer" will walk away?

[Anonymous]

Not an agent but have used escalation clauses as a buyer and seen them as a seller. The triggering contract always has to be shown. It would be dumb to try to fake that bc they’d lose their license. It’s also pretty easy to check bc you see the escalator and can then see what the property closed for, particularly if you’re not the winner. I’ve also never seen a case where an escalation clause didn’t automatically get both managing brokers involved.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not a realtor but a buyer who looked into escalation clauses. I think the seller has to produce the offer at some point? Some listing agents just ask for best and final offers but I think they do go back to some buyers and negotiate price if they like their terms.

Sellers can get someone to write a fake offer to trigger an escalation clause. Asking for it to be produced doesn't protect against this.

True, but no ethical agent would do this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not a realtor but a buyer who looked into escalation clauses. I think the seller has to produce the offer at some point? Some listing agents just ask for best and final offers but I think they do go back to some buyers and negotiate price if they like their terms.

Sellers can get someone to write a fake offer to trigger an escalation clause. Asking for it to be produced doesn't protect against this.

True, but no ethical agent would do this.

Agent doesn’t need to be involved. Agent tells seller about the escalation clause and how much it goes up to. Seller gets friend to write an offer.

[Anonymous]

When shopping for my first home, I had the winning offer with an escalation clause. My agent saw the the escalation and I think I won with $5,000 or something like that, but then the sellers came back with a rentback that I could not afford so the runners-up, a young couple, got the place.

[Anonymous]

Anonymous wrote:So you think they are committing fraud while also risking that "the real buyer" will walk away?

+1. What's being described seems to be an ethics issue, if not illegal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not a realtor but a buyer who looked into escalation clauses. I think the seller has to produce the offer at some point? Some listing agents just ask for best and final offers but I think they do go back to some buyers and negotiate price if they like their terms.

Sellers can get someone to write a fake offer to trigger an escalation clause. Asking for it to be produced doesn't protect against this.

True, but no ethical agent would do this.

Agent doesn’t need to be involved. Agent tells seller about the escalation clause and how much it goes up to. Seller gets friend to write an offer.

But they would need pre-approval usually. They would also need an agent - usually. I think it would be hard to pull off.

[Anonymous]

My sister is a realtor. Never ever do an escalation clause. They don't even have to produce another contract and they use an imaginary one to create a fake bidding war.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not a realtor but a buyer who looked into escalation clauses. I think the seller has to produce the offer at some point? Some listing agents just ask for best and final offers but I think they do go back to some buyers and negotiate price if they like their terms.

Sellers can get someone to write a fake offer to trigger an escalation clause. Asking for it to be produced doesn't protect against this.

That's incredibly paranoid.

No its not it happens every day.

[Anonymous]

Let's take an example: an agent gets an offer with a $200K escalation clause and tells the seller that it won't be triggered unless a competing offer comes in. You all really think that every seller would learn that information, and just shrug and hope for the best? In this country? I mean, let's consider all the things that sellers do to avoid buyers learning about all the flaws in their houses. You think those same scheming sellers would suddenly be totally honest with $200K on the line?