I posted earlier this week about a lot that came up in Charleston.. my realtor ( who is awesome) e mails me at a little at 10pm her time.. new lot on a little street I have already built two homes on and have been wildly profitable.. I want this lot its the last one then the street is built out. she docusigns me 5 minutes later all cash close as soon as title can be done.. ( takes a while in those east coast states.. here in the west coast we can have title done same day) but thats another story. by the time I hear from here next morning 2 other offers now we are in Highest and best. So I put in an escalator clause.. thinking my competition may not know of this or their agents.. I offer 2k more than the next highest bid... list price was 150k I would have gone to 180k... on a highest and best.. but i put in I would pay 2k more than then next highest and best.. must provide written proof. the highest and best was 165k and I got it for 167k close in one week.. DONE deal all signed around.. so I saved 13k on my highest and best and beat two other local builders out of it .. LOL.. so kind of proud of myself today.. So for you all in hot markets escalator clause works and may not be known in some markets .

Sometimes I will also write up an escalation addendum that says we will beat an FHA/VA offer by X amount, and conventional offer by Y, and a cash offer by Z. Ive had a lot of luck with that strategy.

I try to assign dollar values to each thing in the contract to create our escalation amount. For instance say a median priced home in my area is $500k....so for say an FHA/VA buyer to compete against a conventional loan, I typically say we need to escalate $5,000 over best offer if I believe the 2nd best offer to be conventional financing. To beat cash with a quick close, with conventional I might assign a $5,000 escalation or a $7500 escalation with FHA/VA. If I am a cash offer...we might only beat the 2nd best by $1,000, maybe up to $2500. Now I will also assign values to longer or shorter closing times, ability to perform inspections or waive inspection etc. Just won an offer today using a VA loan and we had to escalate $5,000 over next best offer...and we still almost didnt get it due to it being VA. But my reputation to close deals added some extra weight to our offer too and finally got it done.

You have a point there ... perhaps I should modify my statement to say that this is what will work most consistently in any market, hot or cold.

how to handle multi offer situation when you really want it

Sean Cole

Investor · Cincinnati, OH · Member since 2012 · 506 posts · 331 votes

9y

Brent Coombs it's the Golden Rule in action: he who has the gold (the house I want) makes the rules. I can't not buy a house because I don't like the listing agent or seller. That'd be dumb. I also like money too much to not take opportunities to have more of it. To be clear, these are listing agents and selling banks in talking about. I'm my own agent and bank.

how to handle multi offer situation when you really want it

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