Escalation Clauses- Bidding wars

[Anonymous]

No agent will ever admit that fraud to trigger escalation clause happens. And a meaningless "Realtor" designation after an agent's name (which just means they paid a fee to a trade association) doesn't make them an expert on this subject. Just type this into google: escalation clause fraud, and you'll find that many agent licensing organizations advise against escalation clauses because even they think there is fraud.

[Anonymous]

Y'all are working with some pretty unethical realtors if you've never seen the competing paperwork/offer and still agreed to an escalation in your offer.

Use a well-known realtor with a good reputation in your target area/neighborhood and they will walk you through the strategy of an escalation clause and what those increments should be. They will know what is going on in the market. Swarms of people at Open Houses mean nothing until you get to the contracts. People might be nosy neighbors, looking at properties that are out of their range, not have their financing in order, etc.

We had lost 4 houses and on our 5th, we did the escalation in increments of $250. Yes, seems like a small amount. But we were shown the increment counteroffer and corresponding documents each step of the way, and after a while I think the other person just got annoyed, ran out of time or reached their limit.

If you can't see the documents, back out. An escalation clause is part of the legal, binding document that accompanies a home offer.

[Anonymous]

Anonymous wrote:Y'all are working with some pretty unethical realtors if you've never seen the competing paperwork/offer and still agreed to an escalation in your offer.

Use a well-known realtor with a good reputation in your target area/neighborhood and they will walk you through the strategy of an escalation clause and what those increments should be. They will know what is going on in the market. Swarms of people at Open Houses mean nothing until you get to the contracts. People might be nosy neighbors, looking at properties that are out of their range, not have their financing in order, etc.

We had lost 4 houses and on our 5th, we did the escalation in increments of $250. Yes, seems like a small amount. But we were shown the increment counteroffer and corresponding documents each step of the way, and after a while I think the other person just got annoyed, ran out of time or reached their limit.

If you can't see the documents, back out. An escalation clause is part of the legal, binding document that accompanies a home offer.

Please. An escalation offer is simply an advertisement as to how much you’ll pay for the house. It’s a great way to inflate home prices.

[Anonymous]

When we sold our first house there were 8+ offers, some with escalation. I recall the eventual winner's agent emailed my agent on bid day to say something like "this seems likely to go over asking, huh" and the realtor just said "seems likely" and that was the extent of the hard sell from my agent.

If you are one of two buyers and the other one arrived at the last minute then sure, be suspicious. But most people have no incentive to mess with you, and are not going to risk the deal falling through or risk their license/reputation as an agent.

[Anonymous]

Only a total moron would use an escalation clause. Run from ANY realtor that suggests it.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

SMDH at the crap that gets thrown out about real estate and realtors.

That is 100% incorrect. First of all you ABSOLUTELY have to provide the full offer that you escalated against. It’s literally written into the escalation clause verbiage - which by the way, is a legal document. And if what you are saying is that your “sister” is telling you this is how it works, or what she does, she’s an awful realtor and will eventually lose her license. I would report her immediately if I suspected this was going on

-Realtor licensed in VA, MD, and DC

You are a liar. No one ever ask nor is shown it.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

+1000000. It’s all communicated verbally. No one is showing another offer to prove that there was one.

+1 Million. Furthermore you would be scoffed at if you asked for it. There are so many liars on this thread.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

+1000000. It’s all communicated verbally. No one is showing another offer to prove that there was one.

+1 Million. Furthermore you would be scoffed at if you asked for it. There are so many liars on this thread.

This. Realtors want you to think it’s this official legal process. No you’re just telling how much you’ll pay.

[Anonymous]

We had 5 offers on the 1st day. 3 had escalation clauses. We saw them all. We picked the 2nd highest because the highest had an appraisal contingency. The people willing to pay the most did not get the house, and we were required to show the buyers the other offer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

+1000000. It’s all communicated verbally. No one is showing another offer to prove that there was one.

+1 Million. Furthermore you would be scoffed at if you asked for it. There are so many liars on this thread.

This. Realtors want you to think it’s this official legal process. No you’re just telling how much you’ll pay.

There is no "official legal process" at all. You're just showing your hand.

[Anonymous]

It’s literally written in the contract that the escalating offer must be shared. If they don’t share it then they’re in breach and you can walk.

[Anonymous]

Anonymous wrote:It’s literally written in the contract that the escalating offer must be shared. If they don’t share it then they’re in breach and you can walk.

+1. I wouldn't walk but I would tell the seller that the offer can't be used for escalation purposes if it's not shown to me, and insist that the house therefore must be sold to me at my non-escalating offer price.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s literally written in the contract that the escalating offer must be shared. If they don’t share it then they’re in breach and you can walk.

+1. I wouldn't walk but I would tell the seller that the offer can't be used for escalation purposes if it's not shown to me, and insist that the house therefore must be sold to me at my non-escalating offer price.

Shown to you the buyer? Normally it’s not shown to anyone but just shared verbally with the agent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s literally written in the contract that the escalating offer must be shared. If they don’t share it then they’re in breach and you can walk.

+1. I wouldn't walk but I would tell the seller that the offer can't be used for escalation purposes if it's not shown to me, and insist that the house therefore must be sold to me at my non-escalating offer price.

Shown to you the buyer? Normally it’s not shown to anyone but just shared verbally with the agent.

We (buyers) saw the competing offer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s literally written in the contract that the escalating offer must be shared. If they don’t share it then they’re in breach and you can walk.

+1. I wouldn't walk but I would tell the seller that the offer can't be used for escalation purposes if it's not shown to me, and insist that the house therefore must be sold to me at my non-escalating offer price.

Shown to you the buyer? Normally it’s not shown to anyone but just shared verbally with the agent.

No, that's not normal. The offer contract says (or should say) that if you are the winning bid and your escalation clause was triggered, you get to see the other written offers that caused the escalation to be used.