Escalation conspiracy?

[Anonymous]

Anonymous wrote:We just bid on a property and provided an escalation clause that went up over $250k over ask. There were five total offers, and apparently none of them got to the price "the sellers were hoping for." We had the highest cap, but they refused to show us where the escalation landed based on the next best offer. Instead, they countered with "a number they would feel comfortable with." While that number was slightly under our cap, we were unwilling to engage without receiving documentation showing where the escalation ended, and they didn't want to show their cards. Deal fell through because of ridiculous games on the part of the listing agent. They claim they got another offer to "come up" and are ratified. Listing agent told our realtor that "we would be disappointed," but the listing is still active on MLS. Total insanity. Buh-bye!

This sounds pretty standard. Agents use an escalation to counter. You have basically showed your hand. Good for you for not backing down. Most buyers do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We just bid on a property and provided an escalation clause that went up over $250k over ask. There were five total offers, and apparently none of them got to the price "the sellers were hoping for." We had the highest cap, but they refused to show us where the escalation landed based on the next best offer. Instead, they countered with "a number they would feel comfortable with." While that number was slightly under our cap, we were unwilling to engage without receiving documentation showing where the escalation ended, and they didn't want to show their cards. Deal fell through because of ridiculous games on the part of the listing agent. They claim they got another offer to "come up" and are ratified. Listing agent told our realtor that "we would be disappointed," but the listing is still active on MLS. Total insanity. Buh-bye!

This sounds pretty standard. Agents use an escalation to counter. You have basically showed your hand. Good for you for not backing down. Most buyers do.

Is it standard to have the sellers/listing agent ask you to bid against yourself? Because that is what they were doing. The market spoke with 5 offers and the sellers were delusional about what their house was worth (perhaps sellers remorse is settling in now). Trying to extort me for more money and not provide any information about where the other offers landed is not ok. And the sellers wrote a letter trying to tell me that they really *wanted* to sell to us, but that we should counter them blindly with a number with no data to inform our decision. Nice try -- I'm not falling for it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, the agents don't even need to be involved necessarily. All the seller needs to do is recruit a friend to make a bogus offer. The friend can just find some unsuspecting buyers' agent to put in the offer. So really all it takes is an unethical seller who has a friend willing to do it. When potentially hundreds of thousands of dollars on the line, it strains credulity to think this doesn't happen. But good luck finding out and proving it -- the seller and the friend will stay tight lipped and enjoy their riches.

And a bank. You need to submit financing information.

Actually, you don't. Buyers may choose to submit financing info in a competitive market like this, but I bought my first house in 2007 without submitting any financing info.

[Anonymous]

We had one years ago and I was also suspicious
Yes, it was maxed out

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We just bid on a property and provided an escalation clause that went up over $250k over ask. There were five total offers, and apparently none of them got to the price "the sellers were hoping for." We had the highest cap, but they refused to show us where the escalation landed based on the next best offer. Instead, they countered with "a number they would feel comfortable with." While that number was slightly under our cap, we were unwilling to engage without receiving documentation showing where the escalation ended, and they didn't want to show their cards. Deal fell through because of ridiculous games on the part of the listing agent. They claim they got another offer to "come up" and are ratified. Listing agent told our realtor that "we would be disappointed," but the listing is still active on MLS. Total insanity. Buh-bye!

This sounds pretty standard. Agents use an escalation to counter. You have basically showed your hand. Good for you for not backing down. Most buyers do.

Is it standard to have the sellers/listing agent ask you to bid against yourself? Because that is what they were doing. The market spoke with 5 offers and the sellers were delusional about what their house was worth (perhaps sellers remorse is settling in now). Trying to extort me for more money and not provide any information about where the other offers landed is not ok. And the sellers wrote a letter trying to tell me that they really *wanted* to sell to us, but that we should counter them blindly with a number with no data to inform our decision. Nice try -- I'm not falling for it.

Yikes. Your bid with escalation may already be above market (because it’s the highest bid), and they’re trying to manipulate you to pay even more. Good for you for not backing down.

[Anonymous]

Anonymous wrote:We just bid on a property and provided an escalation clause that went up over $250k over ask. There were five total offers, and apparently none of them got to the price "the sellers were hoping for." We had the highest cap, but they refused to show us where the escalation landed based on the next best offer. Instead, they countered with "a number they would feel comfortable with." While that number was slightly under our cap, we were unwilling to engage without receiving documentation showing where the escalation ended, and they didn't want to show their cards. Deal fell through because of ridiculous games on the part of the listing agent. They claim they got another offer to "come up" and are ratified. Listing agent told our realtor that "we would be disappointed," but the listing is still active on MLS. Total insanity. Buh-bye!

Glad you didn't play.

[Anonymous]

Yes. Our bid won and the final number was about 15k below our escalation ceiling

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We just bid on a property and provided an escalation clause that went up over $250k over ask. There were five total offers, and apparently none of them got to the price "the sellers were hoping for." We had the highest cap, but they refused to show us where the escalation landed based on the next best offer. Instead, they countered with "a number they would feel comfortable with." While that number was slightly under our cap, we were unwilling to engage without receiving documentation showing where the escalation ended, and they didn't want to show their cards. Deal fell through because of ridiculous games on the part of the listing agent. They claim they got another offer to "come up" and are ratified. Listing agent told our realtor that "we would be disappointed," but the listing is still active on MLS. Total insanity. Buh-bye!

This sounds pretty standard. Agents use an escalation to counter. You have basically showed your hand. Good for you for not backing down. Most buyers do.

Is it standard to have the sellers/listing agent ask you to bid against yourself? Because that is what they were doing. The market spoke with 5 offers and the sellers were delusional about what their house was worth (perhaps sellers remorse is settling in now). Trying to extort me for more money and not provide any information about where the other offers landed is not ok. And the sellers wrote a letter trying to tell me that they really *wanted* to sell to us, but that we should counter them blindly with a number with no data to inform our decision. Nice try -- I'm not falling for it.

Yikes. Your bid with escalation may already be above market (because it’s the highest bid), and they’re trying to manipulate you to pay even more. Good for you for not backing down.

Thanks to everyone who wrote back saying we did the right thing. Unfortunately, these insane tactics work because there's usually someone who falls for them. Update: We were informed that the sellers/listing agnet got another offer "to come up" and they were ratifying. Listing agent had the nerve to tell our realtor that "your clients will be disappointed." Truth is, I'm not disappointed. I'm insanely annoyed that they wasted that much of my time (and money for pre-inspection) just to try and extort me for more money than market value. It is a completely reasonable ask to see the next best offer's number, and their refusal to show it just tells me they were lying about how "close" it was to where they "felt comfortable." Whoever took the bait and went under contract on this one is really not paying attention. They also scheduled a closing for mid-July when this house in the third year of tax assessment in MoCo and they won't have enough time to claim homestead deduction to be shielded from a huge property tax jump (need to be there for a full fiscal year which would require closing by the end of June). Duh.

[Anonymous]

idk op hot properties a lot of people will bid w pretty similar numbers (a similar walk away point)

[Anonymous]

There's no conspiracy just because houses sell over list. As others said, anyone can walk away even once their bid is accepted. We also had the experience of visiting a house and immediately knowing the level of interest was too rich for my blood. Maybe the people bidding up those properties were chumps but they were willing and able. Our realtor said over and over, "decide what the house is worth to you going in, and then you wont be disappointed if it goes higher, or have cold feet if the bid is accepted." It seems like escalation clauses interfere with this thinking. Sure you don't want to pay top of the escalation clause unless there's verified interest from another buyer, this validates the sale price, but the top number shouldn't be in the offer if it isn't what the house is worth. Given that, if the seller counters at top of the escalation, it seems worth consideration, or at least not surprising that another buyer takes it.

[Anonymous]

Just to add another story - a few years ago we put in an offer that was listed for way under market to spark a bidding war. Our realtor mentioned that she had worked with the listing agent in the past. Near the offer deadline, our realtor said "I think this house is realistically worth X (way over list), so someone is going to be cute and offer X+1,000, so you should escalate to X+3,000". And that is exactly what happened and we got the house. It was too perfect...made me go hmm......

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We just bid on a property and provided an escalation clause that went up over $250k over ask. There were five total offers, and apparently none of them got to the price "the sellers were hoping for." We had the highest cap, but they refused to show us where the escalation landed based on the next best offer. Instead, they countered with "a number they would feel comfortable with." While that number was slightly under our cap, we were unwilling to engage without receiving documentation showing where the escalation ended, and they didn't want to show their cards. Deal fell through because of ridiculous games on the part of the listing agent. They claim they got another offer to "come up" and are ratified. Listing agent told our realtor that "we would be disappointed," but the listing is still active on MLS. Total insanity. Buh-bye!

This sounds pretty standard. Agents use an escalation to counter. You have basically showed your hand. Good for you for not backing down. Most buyers do.

Is it standard to have the sellers/listing agent ask you to bid against yourself? Because that is what they were doing. The market spoke with 5 offers and the sellers were delusional about what their house was worth (perhaps sellers remorse is settling in now). Trying to extort me for more money and not provide any information about where the other offers landed is not ok. And the sellers wrote a letter trying to tell me that they really *wanted* to sell to us, but that we should counter them blindly with a number with no data to inform our decision. Nice try -- I'm not falling for it.

Yikes. Your bid with escalation may already be above market (because it’s the highest bid), and they’re trying to manipulate you to pay even more. Good for you for not backing down.

Thanks to everyone who wrote back saying we did the right thing. Unfortunately, these insane tactics work because there's usually someone who falls for them. Update: We were informed that the sellers/listing agnet got another offer "to come up" and they were ratifying. Listing agent had the nerve to tell our realtor that "your clients will be disappointed." Truth is, I'm not disappointed. I'm insanely annoyed that they wasted that much of my time (and money for pre-inspection) just to try and extort me for more money than market value. It is a completely reasonable ask to see the next best offer's number, and their refusal to show it just tells me they were lying about how "close" it was to where they "felt comfortable." Whoever took the bait and went under contract on this one is really not paying attention. They also scheduled a closing for mid-July when this house in the third year of tax assessment in MoCo and they won't have enough time to claim homestead deduction to be shielded from a huge property tax jump (need to be there for a full fiscal year which would require closing by the end of June). Duh.

While I agree on to your position and i think it was smart of you to not go higher, i disagree on the "extort" connotation, it is negotiation and asking for more money is a negotiation tactic, nobody should take it personal, it's not extortion.. Feel free to walk away but this is capitalism at it's best.

When your ask for more money on a job offer are you extorting the employer? No, and neither is this. Don't cry, it's not a good look.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We just bid on a property and provided an escalation clause that went up over $250k over ask. There were five total offers, and apparently none of them got to the price "the sellers were hoping for." We had the highest cap, but they refused to show us where the escalation landed based on the next best offer. Instead, they countered with "a number they would feel comfortable with." While that number was slightly under our cap, we were unwilling to engage without receiving documentation showing where the escalation ended, and they didn't want to show their cards. Deal fell through because of ridiculous games on the part of the listing agent. They claim they got another offer to "come up" and are ratified. Listing agent told our realtor that "we would be disappointed," but the listing is still active on MLS. Total insanity. Buh-bye!

This sounds pretty standard. Agents use an escalation to counter. You have basically showed your hand. Good for you for not backing down. Most buyers do.

Is it standard to have the sellers/listing agent ask you to bid against yourself? Because that is what they were doing. The market spoke with 5 offers and the sellers were delusional about what their house was worth (perhaps sellers remorse is settling in now). Trying to extort me for more money and not provide any information about where the other offers landed is not ok. And the sellers wrote a letter trying to tell me that they really *wanted* to sell to us, but that we should counter them blindly with a number with no data to inform our decision. Nice try -- I'm not falling for it.

Yikes. Your bid with escalation may already be above market (because it’s the highest bid), and they’re trying to manipulate you to pay even more. Good for you for not backing down.

Thanks to everyone who wrote back saying we did the right thing. Unfortunately, these insane tactics work because there's usually someone who falls for them. Update: We were informed that the sellers/listing agnet got another offer "to come up" and they were ratifying. Listing agent had the nerve to tell our realtor that "your clients will be disappointed." Truth is, I'm not disappointed. I'm insanely annoyed that they wasted that much of my time (and money for pre-inspection) just to try and extort me for more money than market value. It is a completely reasonable ask to see the next best offer's number, and their refusal to show it just tells me they were lying about how "close" it was to where they "felt comfortable." Whoever took the bait and went under contract on this one is really not paying attention. They also scheduled a closing for mid-July when this house in the third year of tax assessment in MoCo and they won't have enough time to claim homestead deduction to be shielded from a huge property tax jump (need to be there for a full fiscal year which would require closing by the end of June). Duh.

While I agree on to your position and i think it was smart of you to not go higher, i disagree on the "extort" connotation, it is negotiation and asking for more money is a negotiation tactic, nobody should take it personal, it's not extortion.. Feel free to walk away but this is capitalism at it's best.

When your ask for more money on a job offer are you extorting the employer? No, and neither is this. Don't cry, it's not a good look.

Definitely not crying. Instead of using the term extort, let's say begging for additional cash while still standing to walk away with almost a million dollars after the market has spoken is not a good look. The obviously have the right to try but doesn't make it an ethical or good faith effort at negotiation. Who wants to deal with people like that?

[Anonymous]

Anonymous wrote:We bought late last year.

Our escalation maxed @100k above asking.

Another offer with essentially identical terms escalated 250k above asking (only difference was we had a 10d faster close time).
We saw their offer. It was totally legit as we recognized the person as our tours overlapped and we googled them once we saw their other offer and their pic was on their LinkedIn account.

The seller, instead of trying to get us up more or the other party up more, took our offer at max escalation.

Why? Because they felt we’d continue caring for the home (said this in our offer letter) vs turn it into a McMansion and piss off the neighbors.

While the sellers still made out like bandits, not every last decision is about money.

Just to be clear though, it doesn't matter that their escalation clause went to 250k over - this is why they aren't THAT much of a leg up, because it's actually more about the interval in the clause, so if their interval was up to $5k or $10k, if they chose them it just means they would get 5 or 10k over YOUR highest escalation. So it's true, for many sellers that isn't enough motivation over different contingencies etc. But it's not that they walked away from $150k - pretty sure they would ahve actually taken an offer of that outright!

[Anonymous]

Yes, we had an escalation clause. This was 5 years ago, and we got lucky with only one other bid. That person, apparently miraculously bid the exact same amount as us (I think it was 5k below ask, this was a different time) and even though they had an escalation clause they said that in VA if the bids are the same the escalation clause doesn't get triggered. I don't understand it but we got the house because we had slightly better contingencies.