Escalation Clause versus waiting to make a counteroffer?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Escalation clauses are for suckers. That gives the seller an incentive to wait as long as possible to shop for better offers. It is better to make a good offer upfront and give them a short deadline to decide like 24 hours. If they are not willing to do that you would have gotten screwed using an escalation clause anyway, so just move on and find another property.

My agent advised me against using short deadlines when buying. However, as a seller, I have to admit that it probably would have worked on me when I sold this past summer. I was very uncertain about the value of my house and anxious to be done with it. Thinking back, there was a number that I would have accepted if it came in on the first day with a deadline. Over the next few days, lots of bids came in and I ended up getting 23k more than that number.

These strategies sometimes work and sometimes don't, depending on the seller. My nephew got a place by offering a little below asking with a 24 hour deadline when it first came on the market.

My sister and her husband got a place by making an offer at list price with a 24 hours deadline within one day of it coming on the market.

We didn't even respond to someone who gave us a lowball offer with a 24 hour deadline. It really depends on the micro market and how badly the seller wants to sell quickly vs. wait for a better offer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't do escalation. Agents abuse them and will just tell other buyers that you've made an offer at the top of your escalation. Also, you never know what games are played to trigger the escalation.

In almost all situations, if you don't do an escalation but your offer is competitive, agents will try to get you to counter -- so that's the better route. There's still abuse here (agents sometimes lie and say that there's a higher offer when there isn't), but it's not as terrible.

You have no evidence of that. And it doesn't make any sense, either.

Look, you agent haters talk out of both sides of your mouths. On the one hand, you say all they care about is closing the deal and getting paid. On the side, you say they'll risk closing the deal by playing games. Which is it?

(Not to mention if there's an offer for list or higher, the seller will owe the commission, so why would the agent risk alienating a good faith buyer? It doesn't make sense).

-- No, not an agent, etc.

Actually, it happened to me. Agent told me that there was a higher offer and asked if I wanted to make a new offer. I declined and withdrew my existing offer. House was still on the market a couple weeks later without being contingent/pending.

That doesn’t mean it happened to you, genius.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Escalations are fine, but require proof of written offer that triggered the escalation (they will remove personal information). Verbal offers do NOT trigger the escalation - if it's not written down, it never existed.

Also put a time limit on your offer (48 hours max) so they can't shop your offer.

And then the seller will just counter offer with the escalation amount. Take it or leave it, not all sellers want to play these stupid little games. Make your offer and be done with it.

Why would I accept the seller’s counter at the top of my range? Show me bid that triggered the escalation.

You would accept the bid because you want the house. I'm speaking from personal experience as a seller and from hearing about the same thing playing out with others. There doesn't need to be a claim that another bid triggered the escalation. If the house is good, and you express willingness to pay a high dollar amount, expect to get called out on it.

+1

Only agents benefit from escalation. If you disclose what you are willing to pay then seller will surely use that information to make a counter offer.

Best is to just put you offer with a short deadline.

How do agents benefit from escalation? The effect on their commission is marginal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Escalations are fine, but require proof of written offer that triggered the escalation (they will remove personal information). Verbal offers do NOT trigger the escalation - if it's not written down, it never existed.

Also put a time limit on your offer (48 hours max) so they can't shop your offer.

And then the seller will just counter offer with the escalation amount. Take it or leave it, not all sellers want to play these stupid little games. Make your offer and be done with it.

Why would I accept the seller’s counter at the top of my range? Show me bid that triggered the escalation.

You would accept the bid because you want the house. I'm speaking from personal experience as a seller and from hearing about the same thing playing out with others. There doesn't need to be a claim that another bid triggered the escalation. If the house is good, and you express willingness to pay a high dollar amount, expect to get called out on it.

+1

Only agents benefit from escalation. If you disclose what you are willing to pay then seller will surely use that information to make a counter offer.

Best is to just put you offer with a short deadline.

How do agents benefit from escalation? The effect on their commission is marginal.

It means house is going to close quickly and quickly getting the check is the only thing agents care about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't do escalation. Agents abuse them and will just tell other buyers that you've made an offer at the top of your escalation. Also, you never know what games are played to trigger the escalation.

In almost all situations, if you don't do an escalation but your offer is competitive, agents will try to get you to counter -- so that's the better route. There's still abuse here (agents sometimes lie and say that there's a higher offer when there isn't), but it's not as terrible.

You have no evidence of that. And it doesn't make any sense, either.

Look, you agent haters talk out of both sides of your mouths. On the one hand, you say all they care about is closing the deal and getting paid. On the side, you say they'll risk closing the deal by playing games. Which is it?

(Not to mention if there's an offer for list or higher, the seller will owe the commission, so why would the agent risk alienating a good faith buyer? It doesn't make sense).

-- No, not an agent, etc.

Actually, it happened to me. Agent told me that there was a higher offer and asked if I wanted to make a new offer. I declined and withdrew my existing offer. House was still on the market a couple weeks later without being contingent/pending.

That doesn’t mean it happened to you, genius.

Hey agent -- Sorry that your stupid tricks backfire on you. Not my fault that you promised the seller a bidding war that never materialized.

[Anonymous]

We bought then sold so wanted it done quickly. Escalation was the easy way for us. I didn't want days of back and forth and people nickel and timing us. $30K over ask with all contingencies waived worked for us.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't do escalation. Agents abuse them and will just tell other buyers that you've made an offer at the top of your escalation. Also, you never know what games are played to trigger the escalation.

In almost all situations, if you don't do an escalation but your offer is competitive, agents will try to get you to counter -- so that's the better route. There's still abuse here (agents sometimes lie and say that there's a higher offer when there isn't), but it's not as terrible.

You have no evidence of that. And it doesn't make any sense, either.

Look, you agent haters talk out of both sides of your mouths. On the one hand, you say all they care about is closing the deal and getting paid. On the side, you say they'll risk closing the deal by playing games. Which is it?

(Not to mention if there's an offer for list or higher, the seller will owe the commission, so why would the agent risk alienating a good faith buyer? It doesn't make sense).

-- No, not an agent, etc.

Actually, it happened to me. Agent told me that there was a higher offer and asked if I wanted to make a new offer. I declined and withdrew my existing offer. House was still on the market a couple weeks later without being contingent/pending.

This same thing happened to me

Why would you withdraw your offer? You sound stupid, things fall through all the time

[Anonymous]

It depends on the neighborhood. We wanted to buy in a very particular area in upper NW - there would have been no chance to counter offer. When we bought, we did see bid that triggered the escalation.

There was a selling agent on a house we didn't buy who tried to get people to increase their bids in spite of the escalation clauses (calling around and telling people where they were "ranked" but not providing numbers) - we withdrew our bid from that house because it was so sketchy. I think there are 2 selling agents in the area who do this so I would just avoid houses they're selling. If you have a local realtor they should know who they are.

[Anonymous]

Anonymous wrote:It depends on the neighborhood. We wanted to buy in a very particular area in upper NW - there would have been no chance to counter offer. When we bought, we did see bid that triggered the escalation.

There was a selling agent on a house we didn't buy who tried to get people to increase their bids in spite of the escalation clauses (calling around and telling people where they were "ranked" but not providing numbers) - we withdrew our bid from that house because it was so sketchy. I think there are 2 selling agents in the area who do this so I would just avoid houses they're selling. If you have a local realtor they should know who they are.

Just name the agent who was trying to push you into a sketchy deal. You won't get in trouble. It helps all of us to know who to avoid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't do escalation. Agents abuse them and will just tell other buyers that you've made an offer at the top of your escalation. Also, you never know what games are played to trigger the escalation.

In almost all situations, if you don't do an escalation but your offer is competitive, agents will try to get you to counter -- so that's the better route. There's still abuse here (agents sometimes lie and say that there's a higher offer when there isn't), but it's not as terrible.

You have no evidence of that. And it doesn't make any sense, either.

Look, you agent haters talk out of both sides of your mouths. On the one hand, you say all they care about is closing the deal and getting paid. On the side, you say they'll risk closing the deal by playing games. Which is it?

(Not to mention if there's an offer for list or higher, the seller will owe the commission, so why would the agent risk alienating a good faith buyer? It doesn't make sense).

-- No, not an agent, etc.

Actually, it happened to me. Agent told me that there was a higher offer and asked if I wanted to make a new offer. I declined and withdrew my existing offer. House was still on the market a couple weeks later without being contingent/pending.

That doesn’t mean it happened to you, genius.

Hey agent -- Sorry that your stupid tricks backfire on you. Not my fault that you promised the seller a bidding war that never materialized.

Do you know how wildly stupid you look when you accuse someone who disagrees with you in this forum of being an agent? You're just confirming to everyone what a complete idiot you are.

I'm not an agent and have no connection to the industry. I'm just a hell of a lot smarter than you and pointing out your stupidity for the world to behold.

[Anonymous]

Anonymous wrote:It depends on the neighborhood. We wanted to buy in a very particular area in upper NW - there would have been no chance to counter offer. When we bought, we did see bid that triggered the escalation.

There was a selling agent on a house we didn't buy who tried to get people to increase their bids in spite of the escalation clauses (calling around and telling people where they were "ranked" but not providing numbers) - we withdrew our bid from that house because it was so sketchy. I think there are 2 selling agents in the area who do this so I would just avoid houses they're selling. If you have a local realtor they should know who they are.

Yah, best to avoid such houses with sketchy agents.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't do escalation. Agents abuse them and will just tell other buyers that you've made an offer at the top of your escalation. Also, you never know what games are played to trigger the escalation.

In almost all situations, if you don't do an escalation but your offer is competitive, agents will try to get you to counter -- so that's the better route. There's still abuse here (agents sometimes lie and say that there's a higher offer when there isn't), but it's not as terrible.

You have no evidence of that. And it doesn't make any sense, either.

Look, you agent haters talk out of both sides of your mouths. On the one hand, you say all they care about is closing the deal and getting paid. On the side, you say they'll risk closing the deal by playing games. Which is it?

(Not to mention if there's an offer for list or higher, the seller will owe the commission, so why would the agent risk alienating a good faith buyer? It doesn't make sense).

-- No, not an agent, etc.

Actually, it happened to me. Agent told me that there was a higher offer and asked if I wanted to make a new offer. I declined and withdrew my existing offer. House was still on the market a couple weeks later without being contingent/pending.

That doesn’t mean it happened to you, genius.

Hey agent -- Sorry that your stupid tricks backfire on you. Not my fault that you promised the seller a bidding war that never materialized.

Do you know how wildly stupid you look when you accuse someone who disagrees with you in this forum of being an agent? You're just confirming to everyone what a complete idiot you are.

I'm not an agent and have no connection to the industry. I'm just a hell of a lot smarter than you and pointing out your stupidity for the world to behold.

OK, smart one, pay tens of thousands to an agent who tells you to submit massive escalation clauses on every house you're interested in, and I will behold your genius at work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Escalation clauses are for suckers. That gives the seller an incentive to wait as long as possible to shop for better offers. It is better to make a good offer upfront and give them a short deadline to decide like 24 hours. If they are not willing to do that you would have gotten screwed using an escalation clause anyway, so just move on and find another property.

My agent advised me against using short deadlines when buying. However, as a seller, I have to admit that it probably would have worked on me when I sold this past summer. I was very uncertain about the value of my house and anxious to be done with it. Thinking back, there was a number that I would have accepted if it came in on the first day with a deadline. Over the next few days, lots of bids came in and I ended up getting 23k more than that number.

As a seller we got early offers with fast deadlines and we just said no thank you and invited them to resubmit for the deadline on Monday or Tuesday or whatever it was. I think one did, but didn’t win. The winning offer was not at the top of its escalation clause. We didnt do anything except show them the next highest bid (minus names) and sign everything.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't do escalation. Agents abuse them and will just tell other buyers that you've made an offer at the top of your escalation. Also, you never know what games are played to trigger the escalation.

In almost all situations, if you don't do an escalation but your offer is competitive, agents will try to get you to counter -- so that's the better route. There's still abuse here (agents sometimes lie and say that there's a higher offer when there isn't), but it's not as terrible.

You have no evidence of that. And it doesn't make any sense, either.

Look, you agent haters talk out of both sides of your mouths. On the one hand, you say all they care about is closing the deal and getting paid. On the side, you say they'll risk closing the deal by playing games. Which is it?

(Not to mention if there's an offer for list or higher, the seller will owe the commission, so why would the agent risk alienating a good faith buyer? It doesn't make sense).

-- No, not an agent, etc.

Actually, it happened to me. Agent told me that there was a higher offer and asked if I wanted to make a new offer. I declined and withdrew my existing offer. House was still on the market a couple weeks later without being contingent/pending.

Realtors lie all the time. And I understand why you wouldn't want to increase your offer.

But why would you withdraw your offer? If you wanted the house at your offer price, then why would you no longer want the house at that same price?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't do escalation. Agents abuse them and will just tell other buyers that you've made an offer at the top of your escalation. Also, you never know what games are played to trigger the escalation.

In almost all situations, if you don't do an escalation but your offer is competitive, agents will try to get you to counter -- so that's the better route. There's still abuse here (agents sometimes lie and say that there's a higher offer when there isn't), but it's not as terrible.

You have no evidence of that. And it doesn't make any sense, either.

Look, you agent haters talk out of both sides of your mouths. On the one hand, you say all they care about is closing the deal and getting paid. On the side, you say they'll risk closing the deal by playing games. Which is it?

(Not to mention if there's an offer for list or higher, the seller will owe the commission, so why would the agent risk alienating a good faith buyer? It doesn't make sense).

-- No, not an agent, etc.

Actually, it happened to me. Agent told me that there was a higher offer and asked if I wanted to make a new offer. I declined and withdrew my existing offer. House was still on the market a couple weeks later without being contingent/pending.

That doesn’t mean it happened to you, genius.

Hey agent -- Sorry that your stupid tricks backfire on you. Not my fault that you promised the seller a bidding war that never materialized.

DP here. I wouldn't assume that the seller knew anything about it. After buying and selling multiple homes, it's clear to me that realtors just make up stuff all the time and purposely keep buyers and sellers in the dark.