Paul S. Henderson, REALTOR®, CRS, South Puget Sound Washington Agent/Broker! (Fathom Realty Washington LLC)

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Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

If the seller said "no" so be it. If the listing agent said "no" without consulting the seller, he/she failed to do their job and present all offers. If they did not understand how it works they need some continuing education.

Nov 17, 2023 03:27 AM
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Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

I've encountered that too, with a "just give us your highest and best".
Maybe they're math skills inhibited and don't want to crunch the numbers to compare the offers for best nets?
When I have a listing, I don't have any concern with setting up an Excel spreadsheet to show my sellers the terms of a multiple offer situation and taking into account any/all escalation clauses.

Nov 16, 2023 07:54 PM
Rainmaker
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Brenda Mayette
Miranda Real Estate Group, Inc. - Glenville, NY
Getting results w/ knowledge & know-how!

Maybe they waived inspections?  Maybe their offer was cash?  Maybe they liked the font on the offer better (stranger things have happened)?  When I hear "no escalations" it's usually an agent that doesn't understand the clause or greed has set in and the seller/agent want to see just how much a buyer will throw at a house (ie. rather than beat the best offer by a little bit they hope the buyer will just go "all in").  

Nov 17, 2023 04:26 AM
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Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Wayne Martin nailed it. 

   Unless an LA has (preferably written) instructions not to present such an offer, that Agent could find themselves up the proverbial creek. 

Nov 17, 2023 06:36 AM
Rainmaker
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Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

When I worked for Prudential, 04 and 05, my broker expressly forbade us to use escalation clauses for our buyers. Did not want them coming back at us in the event that they overpaid. As we know, many buyers did just that to their agents. That's why we have a market conditions advisory in our forms now. LOL

Did not forbid us from receiving offers with escalation clauses. Not widely used in my area. Typically just multiple offers and highest and best if more than one was close and the highest.

Now as for the up to 10K over the highest offer, I don't see why the listing agent did not take it to the seller and explain it. Somebody didn't understand whether it was the listing agent, the seller, or both.

Nov 17, 2023 05:41 AM
Rainmaker
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Gary Frimann, CRS, GRI, SRES
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

Makes one wonder if the offer was presented.  Did the buyer's agent take the full offered commission (maybe representing a relative as their agent), or a cash offer, or a non-contingent offer.  These situations have too many variables without seeing the other offer in my opinion.  The only one that torques my jaw is when the listing agent has a friend from their office get the offer accepted.

Nov 17, 2023 07:51 AM
Rainmaker
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Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

The best price with all the contingencies tied to it. Double back after the sale closes and talk with the listing agent and do the post mortem to learn more about what went down Paul S. Henderson, REALTOR®, CRS . This particular seller favored another contract for his / her own personal reasons.

Nov 17, 2023 03:51 AM
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Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Are agents allowed to accept or decline offers in your state?

We find that sellers are reluctant to accept for a few reasons:

     They dont understand, and neither does their agent.

     They feel insulted that the buyer is trying to get it for one price when the escalation clause indicates that they are willing to pay 10k more.

Nov 17, 2023 12:50 AM
Rainmaker
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John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

I think escalation causes are silly. If I received one on my listing, I would tell my seller to ignore it if the max number was unattractive. If the max number was the best offer received, I would counter for the max amount so there would be no confusion about the purchase price.

Buyers need to write an offer they are willing to stand behind and not a "maybe" offer.

Nov 17, 2023 07:32 AM
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Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
NC Real Estate Transition & Relocation 919-602-848

It depends on your local rules. One problem we have with an escalation clause is proving the highest offer. We cannot share the details of the other offers.

What you can do is make an offer and let them know your client is willing to go higher and it is just a starting point. They may or may not come back to you. But, as mentioned below, giving your highest and best is the best practice.

Nov 17, 2023 06:19 AM
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Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I suspect that the listing agent didn't fully understand how they work and couldn't properly explain it to his/her client.

Nov 17, 2023 04:30 AM
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Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

The listing agent would have to answer that for us to know the truth, but it certainly seems odd that a seller wouldn't accept the best offer on the table.

Nov 17, 2023 04:11 AM
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Alan May
Jameson Sotheby's International Realty - Evanston, IL
An offer you can't refuse!

I've run into agents who were "escalation-clause-challenged".  They either didn't really understand how they worked, or just really didn't like them (they didn't think they were fair, and felt they were cheating).

And while we all know that the agents don't get to make the decision, they do have a lot of influence with the sellers.

I've only run into a situation once where the sellers themselves didn't care for the concept, and turned down a higher escalation clause offer because they felt it was an unfair advantage and wanted to give the bid to the people who "just gave the offer they felt was how much they wanted to pay".

Nov 17, 2023 02:45 AM
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Kris Collis, Associate Broker
Smart Way America Realty - East Stroudsburg, PA
Professional Results you Expect 570-801-5525

Listing agent had both sides?

Nov 16, 2023 09:58 PM
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Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

I'm thinking there was something fishy going on. It doesn't seem to satisfy fiduciary duties. I had this happen to me once. The listing agent had a buyer too. She convinced the seller to accept her offer instead of my buyer's higher offer.

Nov 17, 2023 07:32 AM
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Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

In NC, they are strongly discouraged by the REC but, they are not prohibited. The issue is that we are not allowed to Disclose what another buyer has Offered. Because of that, many listing agents don't know how to handle the escalation clauses presented so, they tend to ignore those Offers.

I don't know how it is in WA but, in my mind, it's an easy thing to negotiate as a listing agent. And, as a BA, it's an easy thing to do to pick up the phone and explain it to the LA, JUST IN CASE they don't know how to manage them. 

Also, did you reach out to the agent to ask about that specific deal (after the fact)? I just had something very similar happen - my client offered $26K over list. Someone else had offered $50K over and won, according to the LA ("Nearly double the overage amount your client presented"). The home sold for $11K LESS than what my client offered! I needed to be able to explain this to my seller. 

What happened is that the inspections revealed major structural defects and the price was adjusted accordingly. 

Nov 17, 2023 07:05 AM
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Peter Mohylsky, Beach Expert
PMI. Destin - Miramar Beach, FL
Call me at 850-517-7098

Experiences does matter and agents don’t get it. 

Nov 17, 2023 04:10 AM
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Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Because if they really wanted the house they'd have come in at the 10k higher price.

Escalation clauses are a very dangerous situation.  Say you have a house listed for 500k.  Someone offers 510 and you offer 510 + 10k over highest offer.  What if two offers have escalation clauses?  Does it ever stop?  Can a house really be sold for "Infinity Plus 10k"?

What if the LA has a buddy bring in an offer for 550k, now your buyers are paying 560k which is probably more than they wanted.  What if the 550k offer was legit, but your clients decide to sue the LA because they think it's a fake offer to drive up the price?  There is too much risk to let those into the mix.

 

And of course... price is never the sole factor.  The terms of the winning offer could have been much better.  Waived inspections, all cash, similar job/past life, name recognition, etc.

Nov 17, 2023 11:34 AM
Rainmaker
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Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

It's not something I would turn down. I have used them myself & think it's a good thing to put into your bag of tricks.

I agree with Fred Griffin Florida Real Estate , the agent that refuses those better have written authority to do so. 

Nov 17, 2023 08:49 AM
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Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

Paul S. Henderson, REALTOR®, CRS were you dealing with an inexperienced agent that just didn't understand? If that be the case I'd suggest that you ask his broker to "school" him on just what an escalation cause is.

Nov 17, 2023 07:35 AM
Rainmaker
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Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

That is unreal.  Some agents are not looking out for their sellers.  I had the same think happen last year and the other agent said it was a cash offer.

 

Nov 17, 2023 07:13 AM
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Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

Agent might have had instructions from seller that they didn't want to deal with bidding wars and escalation clauses. I prefer to just ask for highest and best depending on the current market. Even then, some agents will ask why seller didn't counter. Also, sellers are not required to accept the highest offer. Other factors could have been involved.

Nov 17, 2023 11:00 AM
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Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

My broker says no to escalation clauses, highest and best typically is the way to write a contract, if there are multiple offers. Recording and confidently moving forward is the preference, rather than incurring problems down the road because someone felt they were coerced into paying well over market value.

Nov 17, 2023 08:46 AM
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Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

The answer to your question may be found in the pre-escalation times.

Nov 17, 2023 06:04 AM
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Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

What Wayne Martin said. 

Nov 17, 2023 08:09 AM
Rainmaker
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Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

It gets very confusing when several offers have one ! Who is bumping who 

Nov 18, 2023 05:36 AM
Rainmaker
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Doug Dawes
Keller Williams Evolution - 447 Boston Street, Suite #5, Topsfield, MA - Topsfield, MA
Your Personal Realtor®

Personally, I do not like escalation clauses BUT I would present my buyer's offer. On the flip side as a listing agent, I would present all offers received. A buyer with better terms could trump an escalation clause

Nov 18, 2023 04:04 AM
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Tony Lewis
Summit Real Estate Group - Valencia, CA
Summit Real Estate Group Valencia & Aliso Viejo

I am a firm believer that an escalation clause should be illegal and there is a maximum that anyone can afford for qualify to get the mortgage.

Nov 22, 2023 09:06 AM
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

you actually never know.  I've had an offer that was the highest, then inspection revealed something serious and price was negotiated by $40,000. so someone looking at it after the fact was unaware of what inspection showed or that it was a $50,000 repair issue.  So you don't know what you don't know.

Nov 19, 2023 01:24 PM