On Sun, 02 May 2021 20:29:39 -0400, Clare Snyder
wrote:

On Sun, 2 May 2021 14:59:22 -0700 (PDT), Dave Marulli
wrote:

On Sunday, May 2, 2021 at 4:37:40 PM UTC-4, Bill wrote:
On 5/2/2021 3:43 PM, DerbyDad03 wrote:
They submitted an offer at full asking price ($370K), no contingencies.
The offer included an escalation clause. The escalation clause would
automatically increase their offer to $1000 more than the highest offer
submitted, but not to exceed $410K.
That sounds like a system ready to be "gamed" --much like the people who
bid on their own stuff on ebay. Both the buyer's and the seller's
agents have an incentive to sell at a higher price. I'm not saying
anything shady might happen, but I don't like it! : ) If they want to
auction the house then (IMO, they should) auction it in the "light of day"!


Yes, it could be shady, but part of the process is that the seller has to
show them the offer (or at least a picture thereof) that triggered the
escalation clause.

Of course, as I joked to my son "Oh, you mean the offer that the
seller's sister submitted right after they had read yours?" ;-)

The California Association of Realtors says this in a FAQ:

"Should the buyer include a provision that allows for verification
of the next highest competing offer?

Yes. Since the buyer is making an offer dependent upon the
offers of other buyers, it makes sense that the buyer should be
able to verify that those other offers were in fact bona fide offers.
The buyer may include language such as: "Seller shall, upon
acceptance, provide buyer with a copy of the highest offer received.
Buyer has a right to contact that prospective purchaser making
that offer, or his or her agent, to verify the validity of that offer and
that the other offer is in fact a bona fide offer."

While still ripe for gaming, once you start getting third parties
(especially licensed agents) involved in the scheme things can
get trickier for the schemers.

This was for a house in Indiana. My #2 son is an RE agent in
Nevada. Escalation clauses are not legal there. I'm not sure
of Nevada's exact reason, but from my reading it appears that
some jurisdictions don't allow escalation clauses in a real estate
offer because there is no firm dollar offer being made.
Never heard of them up here either.You need to decide how badly you
want the house and bif accordingly. If a house goes on the market at
$450000 and coparables are selling at $480000 and up you KNOW there
will be competing bids so you decide how much over asking the others
will go and bid higher.
You might end up paying $100 over the next guy to get it, or
$100000. Here in Kitchener Waterloo $300000 over asking is not unheard
of. Nor is 45 offers on a property.

It's strange - a house might be listed at $700000 and be on the
market for 3 weeks before they get an offer that meets asking price -
but list the house at $500,000 and in 3 days you have 20 or more
offers and end up getting $800000. It's pretty much a given that if a
price looks too good to be true it IS - and the listing price has
little relationship to what the selling price will be.

We bought 39 years ago for $67700. We looked at moving about 4 years
ago and $300000 was optimistic - to be charitable. Two years ago we
asked a realtor for a market appraisal and they said it was really
difficult but they wouldn't recommend accepting under $500000. Today
comparables are listing at $650,000 and selling for $700,000 and up
!!!!!.

That's about a 3-1/2% real gain. 6%-2.5% inflation. Discounting the
fact that it kept you dry for four decades, it's not a fantastic
return.

Problem with selling is where do you go for less???

Prezactly. I can sure sell but I don't want to live in the street,
wad of cash or no.