I want this property, how do I get it?

Buying & Selling Real Estate
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I want this property, how do I get it?

Brian Zaug
Lagrangeville, NY · Member since 2017 · 144 posts · 218 votes

So this property popped up on the MLS the other day and my agent and I went to see it yesterday. I knew it was a sweet deal as soon as we walked through it so we put in a cash offer for full asking price (135K). So few hours later, my agent calls me and tells me the house has 15 showings scheduled this weekend and the seller will make his/her decision Monday. ugh.

Well, I really want this property so my question for you all,  is there anything I can do to improve my chances at this point? Any tips or tricks?   I was thinking of upping my offer by 2K and hoping no one else goes above asking price..The numbers still are great at this price.  Do cash buyers typically go above asking price?   Thanks for any help with this..

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y

Brian you have a very simple answer here 

its called an  " Escalator Clause."  which is quite common in most HOT markets especially on the west coast were multiple offers were the norm.

I bought a lot a year ago in Charleston and used it and got the deal.. none of the relators had ever heard of it before. 

so in that market it was not common knowledge of course there will be realtors that know what it is. 

but this does not pigeon hole you to one highest and best.. 

and you don't spend more money than you have to get the deal..  

On this particular block this lot was on there was only 3 vacant lots I had already bought the other two and built the homes out.. so I really wanted the last lot and I got it.   using this clause the other folks interested in it just did the ole highest and best and they lost out.

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  • John Semanchuk
    Charleston, SC · Member since 2013 · 380 posts · 157 votes
    7y

    @Anna French The high bid was $355k.  The next highest bid was $345k.   If the high bidder had a $1k escalation clause in place, they would have only paid $346k netting the seller $9k less.

    0Reply
  • Hannah Krebs
    Flipper/Rehabber · Saint Paul, MN · Member since 2018 · 85 posts · 65 votes
    7y

    I would say pay whatever you feel comfortable. It's not worth overpaying and setting yourself up for failure, but if you have to pay a little more and it still makes sense, offer  a little more. Maybe put in an escalation clause up to whatever you are comfortable paying? Being a cash buyer probably gives you a bit of an edge already. 

    Do a little research on the sellers and find out what motivates them: quick close, cash, etc. When we bought our first house, we actually offered lower than other offers. The house was an estate and the elderly inheritor did not want to move the personal property out of the house. I had my realtor write in a clause that they could leave whatever they wanted to in the house. They accepted our offer for only that reason, though it was 5% lower than existing offers (according to the sellers at close).

    1Reply
  • John Semanchuk
    Charleston, SC · Member since 2013 · 380 posts · 157 votes
    7y

    @Hannah Krebs The phrase I usually use with my buyers in a multiple offer situation is, "bid high enough that if you don't get it, you won't feel bad about it".    That has the buyer sharpening their pencil and figuring out what works best for them.   

    0Reply
  • Hannah Krebs
    Flipper/Rehabber · Saint Paul, MN · Member since 2018 · 85 posts · 65 votes
    7y

    @John Semanchuk Oh my gosh, I didn't mean to tag you in that last forum post. For being a millennial, you'd think I'd know how to use technology a little better!! :)

    0Reply
  • John Semanchuk
    Charleston, SC · Member since 2013 · 380 posts · 157 votes
    7y

    @Hannah Krebs Ha ha, no problem!  You should see me trying to figure out facebook!

    0Reply
  • Marisa R.
    Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    7y

    Learnt something today.... the escalation clause..... brilliant

    3Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Marisa R.:

    Learnt something today.... the escalation clause..... brilliant

    we used them starting in the crazy price runs ups in the SF bay area in the 80s  at least that's the first time I had heard of it.

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    2Reply
  • Brian Zaug
    OP
    Lagrangeville, NY · Member since 2017 · 144 posts · 218 votes
    7y

    Guys, thanks so much for the ideas and input.  I really appreaciate it.  The seller is waiting until Wed for highest and best so i'm going to bump up my offer a bit more.

    Victor S They are asking 135K for the house. 2 units,1350sqft, 4bdrm/1bth each unit. With a good cleaning and some paint and a few little things, each unit should rent for approx $1400 maybe a tad more even. Cash flow after PITI, vacancy, cap ex, etc should be around $1300...That's a sweet deal in my book...

    1Reply
  • David Walkotten
    Rental Property Investor · Grand Rapids, MI · Member since 2017 · 75 posts · 44 votes
    7y
    @Brian Zaug We got a deal recently by wiring non-refundable earnest money upon the offer acceptance. Might try that!
    0Reply
  • Susan M. Mendrysa
    West Lafayette, IN · Member since 2018 · 31 posts · 20 votes
    7y
    @Jay Hinrichs Yes, escalator clause was my suggestion also. Every offer we put in during our time in Seattle had an escalator clause built in.
    0Reply
  • Amber Gonion
    Real Estate Broker · Hugo, MN · Member since 2016 · 688 posts · 596 votes
    7y

    Your agent should be giving you all these options not our group.  If you don't think your agent can give you every option available and suggest the correct one, find a new agent.

    0Reply
  • John Woodrich
    Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Mark S.:
    @Brad Braun Not sure how things are in your market but here in Minnesota a full price cash offer often does not get you the deal. I have made many of those over the past two years that were not accepted because of multiple offers.

    Cash is king but because of the demand in our market realtors have been intentionally listing some properties under market price to spur a bidding war.  I have heard of properties selling up to $70k over list.  There are a lot of cash buyers scouring in our market.

    0Reply
  • Mike D'ArrigoPro Member
    Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
    7y

    @Brian Zaug 15 showings is not the same as 15 offers. Before doing anything, wait and see how many bona fide offers they may or may not get. 

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