If I had an a offer accepted without an inspection contingency

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, have you used an escalation clause or just made an offer over ask?

Just made an offer over ask. It was stupid, I should have used an escalation clause.

No- you made an offer so that there was no open house. In this situation you do not have an escalation clause. You need to sweeten the deal so that it is not worth it for the sellers to have the open house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, have you used an escalation clause or just made an offer over ask?

Just made an offer over ask. It was stupid, I should have used an escalation clause.

The agent should have advised you better.

Yes, I agree. I wish I had thought of this. I paid at least $50K over what it might have gone for.

An escalation clause is not appropriate for the situation you were in.

Why not? I wound up paying $100K over ask for a house that isn’t worth that.

DP.

The escalation clause was not appropriate because you bid on the house before the Open House. You bid high in order to stop them from having an Open House and put the house under competition. Essentially you bid high to stop you getting into a competitive auction where you would have to outbid other competitive offers. Escalation clauses only work if there is competition. If there is no competition, then the escalation clause doesn't engage, but from the lowest offer, the seller has to agree to the low offer or decline. The seller cannot activate the escalation.

So, let's say the house is on the market for $500K. You put in a bid of $600K and the seller agreed to take the money in hand and cancel the Open House. Let's say, instead, you offered $550K with an escalation clause up to $600K. If the seller wanted competition, they might not accept the $550K because they think they'll get more for a competitive situation and want to go to the Open House. But without competing offers, the seller cannot get more than $550K. Their choice is to accept the $550K or decline. They decline. Now it gets to the Open house and say you repeat your offer or extend your offer until after the Open House. But there is another buyer who also bids $550K, but they have an escalation clause up to $610K. They will win the house for $601K because your escalation clause only went up to $600K. In the first scenario, you win the house for $600K because you got them to cancel the Open House and you were the only offer. In the other case, you have the escalation clause, but because they declined and went to Open House, you got beat out by someone with a higher escalation clause.

In any event, the escalation clause will never engage if there are no other buyers competing, so then the sellers have the option to accept or decline on the bottom offer. If they decline, then you lose the "bid first, bid high" gamble. And in neither of the examples does it matter what appraisal sites say the house is worth. The thing that determines what the house is worth is what is the highest amount that a buyer is willing to offer. You won that with your bid, so you set the worth of the house.

OP submitted a new offer after the open house as the seller did not accept their full price offer before the OH. It was dumb to not use the escalation clause. It sounds like there were no other bidders.

[Anonymous]

Anonymous wrote:Why do you want an inspection? They are over rated. They can be used for leverage in a soft market but there’s nothing major an inspector will notice that a savvy home owner won’t. You’re willing to pay 100k over asking but worried about minor repairs that might be 5-10k? Anything over that will be really hard to hide.

Inspections are pointless in a hot market on a house that will go fast. Your agent gave you good advice, if you had to have that house. If you wanted an inspection, even if they gave you one, they can refuse to remedy and exit the contract. Which they would do bc the next buyer won’t want an inspection.

Why do you want an inspection?

It’s basic due diligence on a substantial investment.

I have never regretted hiring a vetted professional with subject matter expertise to conduct due diligence, whether it is financial analysis of a stock, a vehicle inspection, or a home. I have never regretted losing out on something I’m vetting to avoid a money pit.


But that’s just me.

If I owned a problematic property (I don’t, because inspections), the DCUM “Why get an inspection?” people would be my ideal buyers.

[Anonymous]

“OP submitted a new offer after the open house as the seller did not accept their full price offer before the OH. It was dumb to not use the escalation clause. It sounds like there were no other bidders.”

OP. No I didn’t. I submitted the offer to prevent the open house, which did not take place (they cancelled it).

[Anonymous]

If I was a home inspector, I'd get my real estate license ASAP and market myself as the only agent/inspector in one.

I'll inspect the house on the visit, while you tour the house and talk about what color to paint the dining room, I'll be looking at the foundation. While you debate a kitchen remodel, I'll bein the attic.

[Anonymous]

OP, what did you end up doing?

Zillow sent me an email about a house relisted because the buyer had a change of heart- was wondering if it was your house.

[Anonymous]

Anonymous wrote:OP, what did you end up doing?

Zillow sent me an email about a house relisted because the buyer had a change of heart- was wondering if it was your house.

It’s not.

Talking to a lawyer this weekend I hope.

[Anonymous]

at this whole thread. OP, you sound so dumb.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why do you want an inspection? They are over rated. They can be used for leverage in a soft market but there’s nothing major an inspector will notice that a savvy home owner won’t. You’re willing to pay 100k over asking but worried about minor repairs that might be 5-10k? Anything over that will be really hard to hide.

Inspections are pointless in a hot market on a house that will go fast. Your agent gave you good advice, if you had to have that house. If you wanted an inspection, even if they gave you one, they can refuse to remedy and exit the contract. Which they would do bc the next buyer won’t want an inspection.

Why do you want an inspection?

It’s basic due diligence on a substantial investment.

I have never regretted hiring a vetted professional with subject matter expertise to conduct due diligence, whether it is financial analysis of a stock, a vehicle inspection, or a home. I have never regretted losing out on something I’m vetting to avoid a money pit.


But that’s just me.

If I owned a problematic property (I don’t, because inspections), the DCUM “Why get an inspection?” people would be my ideal buyers.

It’s adorable that you think that inspections find anything other than the most egregious problems.

I assure you: you have been lucky, not smart.

[Anonymous]

OP, be prepared you lose your EMD. You also need to lose your agent.

[Anonymous]

Anonymous wrote:OP, be prepared you lose your EMD. You also need to lose your agent.

You will absolutely lose your EMD and if it’s that important to you to get out of the sale then be honest and do it quickly! As a recent seller in the DC area I took the offer with no inspection, no contingencies and cleanest sale because I was on a tight turnaround to buy in another state. It’s scary to buy and you always have a little doubt - you are putting a lot of trust in other people, a property you really know nothing about, and wondering if it’s the right price. If I were in your shoes I would walk or see if you can get an informational inspection.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why do you want an inspection? They are over rated. They can be used for leverage in a soft market but there’s nothing major an inspector will notice that a savvy home owner won’t. You’re willing to pay 100k over asking but worried about minor repairs that might be 5-10k? Anything over that will be really hard to hide.

Inspections are pointless in a hot market on a house that will go fast. Your agent gave you good advice, if you had to have that house. If you wanted an inspection, even if they gave you one, they can refuse to remedy and exit the contract. Which they would do bc the next buyer won’t want an inspection.

Why do you want an inspection?

It’s basic due diligence on a substantial investment.

I have never regretted hiring a vetted professional with subject matter expertise to conduct due diligence, whether it is financial analysis of a stock, a vehicle inspection, or a home. I have never regretted losing out on something I’m vetting to avoid a money pit.


But that’s just me.

If I owned a problematic property (I don’t, because inspections), the DCUM “Why get an inspection?” people would be my ideal buyers.

It’s adorable that you think that inspections find anything other than the most egregious problems.

I assure you: you have been lucky, not smart.

She is Smarter than OP.