My La Crescenta listing on Hamilton closed this week.
I, as do most real estate agents try to cut down on printing; there is so much paper waste in a real estate office. I received somewhere around 20 offers. Most were over asking price and several were from cash buyers. I only printed the three best offers.
I knew both the buyer and the seller, but that isn’t what got my buyer’s agent offer accepted.
It’s a seller’s market and most Los Angeles homes sales are sold in multiple offers. The buyer’s offer included a personal letter from the buyer, a preapproval and evidence of funds to close (most every offer did as well). The home was vacant so the offer noted a quick close (most other offers did too).
So what did the buyer’s agent do to make her offer stand out?
She used an Escalation (or escalator) Clause. Her buyer offered a certain price and then noted that he would pay that price but in the event the seller received a higher offer, the buyer would increase his price to make it higher than the highest offer the seller received not to exceed a certain dollar amount. Let’s break that down:
Asking Price $750,000
Buyer agrees to increase their purchase price to be $5,000 higher than seller’s best offer not to exceed $785,000.
In the event that seller receives an offer of $765,000 the buyer’s offer is escalated to $770,000 (saving the buyer $15,000).
Note: The seller is under no obligation to accept the escalation clause.
Is an escalation clause the way to go? Not always, when representing the buyer, a Realtor needs to be certain the seller’s real estate agent understands the escalation clause. Some real estate agents are easily confused and a savvy buyer’s agent does not want to annoy the listing agent.
Will an escalation clause put off the seller? It might, the seller might resent the fact that the buyer just won’t write their best offer.
Related Post: How to Craft a Winning Offer