MY HIGHER BID DIDNT WIN INVESTMENT PROPERTY

[Adam Johnson]

Hello any feedback will be greatly appreciated in this matter, an investment property was listed in a decent neighborhood around me a couple of weeks ago  and from my calculations it was going to be well worth it to pay more than their asking price of $40000 because a similar number of bedrooms/baths just across the street had gone into pending at $289000. so i offered $45000 with an escalation up till $70000  and all bids had to be submitted by 6pm ,next day home went into pending and my agent told me they picked a higher offer i was disappointed because i really believed i had a god shot at the house, so i proceeded to ask my agent how much the  offer that beat mine was and she said she wont know till closing, a few days ago i decided to look again only to see the home had sold for 61000, a good 9000 less than my high offer, was buying as is no contingencies and paying cash with proof of funds . I think something fishy went on  but cant prove it ,did my agent not submit my offer?  or was there some internal collusion to steal it from me? Any info will be greatly appreciated thanks  

[Nathan Gesner]

Quote from @Adam Johnson:

Hello any feedback will be greatly appreciated in this matter, an investment property was listed in a decent neighborhood around me a couple of weeks ago  and from my calculations it was going to be well worth it to pay more than their asking price of $40000 because a similar number of bedrooms/baths just across the street had gone into pending at $289000. so i offered $45000 with an escalation up till $70000  and all bids had to be submitted by 6pm ,next day home went into pending and my agent told me they picked a higher offer i was disappointed because i really believed i had a god shot at the house, so i proceeded to ask my agent how much the  offer that beat mine was and she said she wont know till closing, a few days ago i decided to look again only to see the home had sold for 61000, a good 9000 less than my high offer, was buying as is no contingencies and paying cash with proof of funds . I think something fishy went on  but cant prove it ,did my agent not submit my offer?  or was there some internal collusion to steal it from me? Any info will be greatly appreciated thanks  

Nobody can answer this question for you. The other offer may have been stronger than yours, but then they negotiated something lower after inspections.

Even if a buyer says they will take the property in "as is" condition, they are still legally allowed to come back and negotiate the price down based on what they've found. If this house sold for 80% below market, there had to be some serious issues with it. You probably escaped a money pit.

[Adam Johnson]

o Wasn't going to do any inspections, buying as is where is all sales final no contingencies either

[Russell Brazil]

Quote from @Adam Johnson:

Hello any feedback will be greatly appreciated in this matter, an investment property was listed in a decent neighborhood around me a couple of weeks ago  and from my calculations it was going to be well worth it to pay more than their asking price of $40000 because a similar number of bedrooms/baths just across the street had gone into pending at $289000. so i offered $45000 with an escalation up till $70000  and all bids had to be submitted by 6pm ,next day home went into pending and my agent told me they picked a higher offer i was disappointed because i really believed i had a god shot at the house, so i proceeded to ask my agent how much the  offer that beat mine was and she said she wont know till closing, a few days ago i decided to look again only to see the home had sold for 61000, a good 9000 less than my high offer, was buying as is no contingencies and paying cash with proof of funds . I think something fishy went on  but cant prove it ,did my agent not submit my offer?  or was there some internal collusion to steal it from me? Any info will be greatly appreciated thanks  

 The amount below your max escalation is completely irrelevant. How much were your escalation increments? Let's say you were escalating in $1,000 increments....that means your offer was only $62,000 then, only $1,000 over the close price. A negligible amount.

There could easily be other terms a seller prefers over making $1,000 more. Maybe the buyer was paying 100% of transfer and recordation taxes. Maybe they were closing on a more preferred date.  Maybe they had a better agent. 

[Adam Johnson]

Escalation was $1000  true so i asked my agent if she could find out why the other bidder beat me and she doesnt seem to have any answers at all, shes saying she will ask around why is that an appropriate answer ? i expect her to know why so going forward i can revise my strategy to stand a better chance or admitting she got beat by a better agent  is going to make her look bad so she rather not?

[Bruce Woodruff]

Quote from @Adam Johnson:

Escalation was $1000  true so i asked my agent if she could find out why the other bidder beat me and she doesnt seem to have any answers at all, shes saying she will ask around why is that an appropriate answer ? i expect her to know why so going forward i can revise my strategy to stand a better chance or admitting she got beat by a better agent  is going to make her look bad so she rather not?

 #1 - Get a better agent or you will get beat out every time. She should have some answers for you.

[Theresa Harris]

Quote from @Adam Johnson:

Escalation was $1000  true so i asked my agent if she could find out why the other bidder beat me and she doesnt seem to have any answers at all, shes saying she will ask around why is that an appropriate answer ? i expect her to know why so going forward i can revise my strategy to stand a better chance or admitting she got beat by a better agent  is going to make her look bad so she rather not?

 She may not want to ask around or the listing agent may not tell her.  If she can't get you an answer, work with another agent.  As Russell said, if your price was $1K over the other offer, then that may not have been enough.  Perhaps closing dates or something else was better.

[Russell Brazil]

Quote from @Adam Johnson:

Escalation was $1000  true so i asked my agent if she could find out why the other bidder beat me and she doesnt seem to have any answers at all, shes saying she will ask around why is that an appropriate answer ? i expect her to know why so going forward i can revise my strategy to stand a better chance or admitting she got beat by a better agent  is going to make her look bad so she rather not?

 Make better offers. $1,000 escalation is weak. Make weak offers, get weak results. Make strong offers, get strong results. 

[Bill Brandt]

@Russell Brazil

Thank you!  You provided the “one thing I learned today”. While it’s obvious when you think about it that his losing bid was only $1,000 more I bet 90% of the people who read the OP, like me, thought he had bid $9,000 more. I think even the OP though that. 

It’s obvious after you explained it that the winning buying might be on to a winning strategy. Always offer to cover a bunch of costs other offers wouldn’t think of, and then offer that much less. Anyone with an escalation offer will lose as most if not all of them saying bid $500 or $1,000 more than next highest bid. 

Winning bid could have said seller can stay in property for up to 45 days. Or buyer will forfeit $5,000 EMD if they back out, or buyer will pay for up to $5,000 in sellers moving costs. Anything that's worth more than a couple thousand dollars to the seller but isn't in the offer amount. All kinds of ways to beat the escalation offer.

[Ricardo S.]

@Adam Johnson

I almost lost out on a property doing this exact same thing as you did with an escalation clause.

Next time offer your highest bid and call it a day if you really want that property.