Comments on: REALTOR’s Negotiation Tactics: The Escalation Clause

By: jim

jim — Mon, 13 Jun 2011 01:20:28 +0000

It is not legal to show the buy side realtor anouther offer just because they use this escalation clause

By: Denise

Denise — Sun, 20 Mar 2011 22:01:41 +0000

And what happen if I have 3 offers and the 3 of them have escalation addendums….one escalation goes over the other and until you get the highest escalation offer?

By: Top 10 real estate post of the day for 1/5/2009 : Tempe real estate and free home search

Tue, 05 Jan 2010 15:52:22 +0000

[...] REALTOR’s Negotiation Tactics: The Escalation Clause – Is the escalation clause part your your arsenal? If not, it should [...]

By: Dean Ouellette

Dean Ouellette — Tue, 05 Jan 2010 06:26:58 +0000

No, sorry for miscommunication. Lets say there are 5 offers, the highest is 125k and you have 1k above up to 130k, then when we put your offer in we put it in to the bank at 126k, that is what i mean. .-= Dean Ouellette´s last blog ..Tempe AZ real estate market for 85284 in 2009 =-.

By: Shar Rundio

Shar Rundio — Tue, 05 Jan 2010 05:48:59 +0000

Hey, Dean! Thanks for sharing your experience and expertise. I like the 1% rule of thumb. I’ve usually started with $1000 and then based on the purchase price encouraged the buyer to adjust it but that is a better way to make recommendations.

Thanks for the input on the banks, too. It would seem though (if I’m understanding you correctly) that they don’t really allow the escalation to be used as intended, correct? The offer is just automatically escalated?

By: Dean Ouellette

Dean Ouellette — Tue, 05 Jan 2010 04:41:57 +0000

OK I had to count my deals in 2009, of my deals, 15 (a little more than half) were actually acquired using the escalator clause, so I am a big believer in it. Glad to see you using it, you have some great language you use too and your clients should be thrilled to be using someone so obviously a professional as yourself.

One of my favorites is when agents say “the bank wont take an escalator.” First it is the right of the agent to reject an escalator clause, but be honest about it. Our team works with 26 banks for REOs, not one of them does not allow escalator clauses, they just tell us to submit offers, so if you as an agent were to submit one we just enter that as the high bid. But some agents say “banks do not accept” they are jsut saying they dont want to accept them.

One thing I tell my buyers when they want to use it is the escalator should be 1% of price. Because as a listing agent if someone came in on a 300k property with a “$500 more” I would think that is weak. So for that reason I tell my clients to use it, and use it often, but at 1% out of respect for everyone in the process.

Another great post Shar. Look forward to your postings.
.-= Dean Ouellette´s last blog ..Tempe AZ real estate market for 85284 in 2009 =-.