Author Topic: Where the market is - Buyer Offers  (Read 15346 times)

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Offline USCTrojanCPA

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Re: Where the market is - Buyer Offers
« Reply #90 on: April 01, 2021, 07:54:54 PM »
No luck on Navigator.  My buyer bid $1.311m and then used an escalation clause going up to $1.321m with a $1,000 over the highest offer/counter.  Listing agent emailed me this late last night when I asked if the top buyer bid above $1.321m here was her reply...

"Yes, by a good amount over your max escalation amount."

It might hurt you. The listing agent can make use of your escalation clause and tell the other buyers that the highest offer is $1.321m, and you have to bid over that price. I am sure someone will do so.

Personally I think an escalation clause with a max limit doesnt make any sense.  Put yourself in the sellers position.  If a buyer says they will pay $X over the highest bid up to $Y amount, then I would just simply counter at $Y or higher regardless of whether I had other offers or not.  Furthermore would a thousand or two above the next bid really matter since it is literally a small fraction of the price of these homes?  Escalation clauses simply give the seller an advantage without gaining any for the buyer.
yeah, i mentioned it before, but this market is way too crazy. unless you really need a home, might as well sit on the side lines and let things cool down.

Yes what is happening is crazy but I would argue that the prices that we are seeing are market prices.  We are out of balance in the market and prices have to continue to keep going up to balance things out.  I think prices will be upon another 3-5% at minimum from today's prices by the end of the year because there is that much demand out there.
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Offline sleepy5136

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Re: Where the market is - Buyer Offers
« Reply #91 on: April 01, 2021, 09:52:12 PM »
No luck on Navigator.  My buyer bid $1.311m and then used an escalation clause going up to $1.321m with a $1,000 over the highest offer/counter.  Listing agent emailed me this late last night when I asked if the top buyer bid above $1.321m here was her reply...

"Yes, by a good amount over your max escalation amount."

It might hurt you. The listing agent can make use of your escalation clause and tell the other buyers that the highest offer is $1.321m, and you have to bid over that price. I am sure someone will do so.

Personally I think an escalation clause with a max limit doesnt make any sense.  Put yourself in the sellers position.  If a buyer says they will pay $X over the highest bid up to $Y amount, then I would just simply counter at $Y or higher regardless of whether I had other offers or not.  Furthermore would a thousand or two above the next bid really matter since it is literally a small fraction of the price of these homes?  Escalation clauses simply give the seller an advantage without gaining any for the buyer. 



I don't understand how it gives the Seller an advantage when the escalation clause is used on a best and final counter.  A best and final counter is what it means, all buyers are to provide their highest offers and the Seller does not come back with another counter above that the price that the buyers respond with.  I would argue that an escalation clause would be helpful to buyers as it may limit them from overbidding on a home if they already had the highest offer before the escalation.  I've had dozens of situations on the listing side when I sent out best n final counters to multiple buyers the top buyer would outbid themselves and be $20k-$40k higher than the 2nd highest offer.
I think the main issue is the lack of transparency and trust in the current bidding process for the buyer. If you send out "best and final offers", as a buyer, how do I know where I stand? What if I'm the highest bidder and you still send that. I don't want to bid higher if I know I'm the highest offer. I've said it before and I'll say it again, with this type of bidding war, there needs to be transparency and trust for the buyer. Otherwise there will be buyers that will be hesitant to put their actual highest. The last thing I want to do is bid against myself. The current process definitely benefits the seller and not the buyer. But maybe I'm only speaking for myself and I'm wrong about the general consensus.

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Re: Where the market is - Buyer Offers
« Reply #92 on: April 01, 2021, 10:00:33 PM »
No luck on Navigator.  My buyer bid $1.311m and then used an escalation clause going up to $1.321m with a $1,000 over the highest offer/counter.  Listing agent emailed me this late last night when I asked if the top buyer bid above $1.321m here was her reply...

"Yes, by a good amount over your max escalation amount."

It might hurt you. The listing agent can make use of your escalation clause and tell the other buyers that the highest offer is $1.321m, and you have to bid over that price. I am sure someone will do so.

Personally I think an escalation clause with a max limit doesnt make any sense.  Put yourself in the sellers position.  If a buyer says they will pay $X over the highest bid up to $Y amount, then I would just simply counter at $Y or higher regardless of whether I had other offers or not.  Furthermore would a thousand or two above the next bid really matter since it is literally a small fraction of the price of these homes?  Escalation clauses simply give the seller an advantage without gaining any for the buyer. 



I don't understand how it gives the Seller an advantage when the escalation clause is used on a best and final counter.  A best and final counter is what it means, all buyers are to provide their highest offers and the Seller does not come back with another counter above that the price that the buyers respond with.  I would argue that an escalation clause would be helpful to buyers as it may limit them from overbidding on a home if they already had the highest offer before the escalation.  I've had dozens of situations on the listing side when I sent out best n final counters to multiple buyers the top buyer would outbid themselves and be $20k-$40k higher than the 2nd highest offer.
I think the main issue is the lack of transparency and trust in the current bidding process for the buyer. If you send out "best and final offers", as a buyer, how do I know where I stand? What if I'm the highest bidder and you still send that. I don't want to bid higher if I know I'm the highest offer. I've said it before and I'll say it again, with this type of bidding war, there needs to be transparency and trust for the buyer. Otherwise there will be buyers that will be hesitant to put their actual highest. The last thing I want to do is bid against myself. The current process definitely benefits the seller and not the buyer. But maybe I'm only speaking for myself and I'm wrong about the general consensus.

You are completely right that the multiple seller counter offer for best & final offers benefits the seller.  The escalation clause is one way to try to limit overbidding.  If you want a fair transparent bidding process then an online auction needs to be set up where the clock gets reset to 5 minutes after the last bid so there is no snipe bids like you have on Ebay.  That way buyers would see have full transparency.  This would favor the buyers not the seller so not sure if you'll see from listing agents that anytime soon. My job as a listing agent is to get the highest price with a qualified possible as quickly and effectively as I can. I've been easily able to motivate/encourage buyer agents to have their buyers bid higher over the years where the top buyer just outbid themselves with the best and final counter.
Martin Mania, CPA
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mmania001@yahoo.com
714-747-3884 cell

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Offline sleepy5136

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Re: Where the market is - Buyer Offers
« Reply #93 on: April 01, 2021, 10:15:25 PM »
No luck on Navigator.  My buyer bid $1.311m and then used an escalation clause going up to $1.321m with a $1,000 over the highest offer/counter.  Listing agent emailed me this late last night when I asked if the top buyer bid above $1.321m here was her reply...

"Yes, by a good amount over your max escalation amount."

It might hurt you. The listing agent can make use of your escalation clause and tell the other buyers that the highest offer is $1.321m, and you have to bid over that price. I am sure someone will do so.

Personally I think an escalation clause with a max limit doesnt make any sense.  Put yourself in the sellers position.  If a buyer says they will pay $X over the highest bid up to $Y amount, then I would just simply counter at $Y or higher regardless of whether I had other offers or not.  Furthermore would a thousand or two above the next bid really matter since it is literally a small fraction of the price of these homes?  Escalation clauses simply give the seller an advantage without gaining any for the buyer. 



I don't understand how it gives the Seller an advantage when the escalation clause is used on a best and final counter.  A best and final counter is what it means, all buyers are to provide their highest offers and the Seller does not come back with another counter above that the price that the buyers respond with.  I would argue that an escalation clause would be helpful to buyers as it may limit them from overbidding on a home if they already had the highest offer before the escalation.  I've had dozens of situations on the listing side when I sent out best n final counters to multiple buyers the top buyer would outbid themselves and be $20k-$40k higher than the 2nd highest offer.
I think the main issue is the lack of transparency and trust in the current bidding process for the buyer. If you send out "best and final offers", as a buyer, how do I know where I stand? What if I'm the highest bidder and you still send that. I don't want to bid higher if I know I'm the highest offer. I've said it before and I'll say it again, with this type of bidding war, there needs to be transparency and trust for the buyer. Otherwise there will be buyers that will be hesitant to put their actual highest. The last thing I want to do is bid against myself. The current process definitely benefits the seller and not the buyer. But maybe I'm only speaking for myself and I'm wrong about the general consensus.

You are completely right that the multiple seller counter offer for best & final offers benefits the seller.  The escalation clause is one way to try to limit overbidding.  If you want a fair transparent bidding process then an online auction needs to be set up where the clock gets reset to 5 minutes after the last bid so there is no snipe bids like you have on Ebay.  That way buyers would see have full transparency.  This would favor the buyers not the seller so not sure if you'll see from listing agents that anytime soon. My job as a listing agent is to get the highest price with a qualified possible as quickly and effectively as I can. I've been easily able to motivate/encourage buyer agents to have their buyers bid higher over the years where the top buyer just outbid themselves with the best and final counter.
yeah and I think in this type of market, it’s best to give your best offer the first time and leave it as is. That way you don’t play that game of bidding against yourself. If you win, you can say you win and didn’t play any games in doing so.

Offline akkord

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Re: Where the market is - Buyer Offers
« Reply #94 on: April 01, 2021, 10:24:33 PM »
It's a sellers market, sucks to be a buyer now, until the winds change and it becomes a buyers market, you're at the mercy of the seller.  Some agents are shady, some aren't, if you're a buyer now you have to play the game to get a home. 

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Offline zovall

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Re: Where the market is - Buyer Offers
« Reply #95 on: April 01, 2021, 10:27:12 PM »
The current process definitely benefits the seller and not the buyer. But maybe I'm only speaking for myself and I'm wrong about the general consensus.

I don't think you are wrong. This is the worst time to be a buyer because it is such a strong sellers market. Everything is to the benefit of the seller right now and buyers don't have any leverage. Regardless, there will still be people who feel like they need to buy a home, even in this market, and they are competing with many other buyers.  Using an escalation clause can help them compete.

Offline kpatnps

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Re: Where the market is - Buyer Offers
« Reply #96 on: April 02, 2021, 05:18:23 PM »
No luck on Navigator.  My buyer bid $1.311m and then used an escalation clause going up to $1.321m with a $1,000 over the highest offer/counter.  Listing agent emailed me this late last night when I asked if the top buyer bid above $1.321m here was her reply...

"Yes, by a good amount over your max escalation amount."

It might hurt you. The listing agent can make use of your escalation clause and tell the other buyers that the highest offer is $1.321m, and you have to bid over that price. I am sure someone will do so.

Personally I think an escalation clause with a max limit doesnt make any sense.  Put yourself in the sellers position.  If a buyer says they will pay $X over the highest bid up to $Y amount, then I would just simply counter at $Y or higher regardless of whether I had other offers or not.  Furthermore would a thousand or two above the next bid really matter since it is literally a small fraction of the price of these homes?  Escalation clauses simply give the seller an advantage without gaining any for the buyer. 



I don't understand how it gives the Seller an advantage when the escalation clause is used on a best and final counter.  A best and final counter is what it means, all buyers are to provide their highest offers and the Seller does not come back with another counter above that the price that the buyers respond with.  I would argue that an escalation clause would be helpful to buyers as it may limit them from overbidding on a home if they already had the highest offer before the escalation.  I've had dozens of situations on the listing side when I sent out best n final counters to multiple buyers the top buyer would outbid themselves and be $20k-$40k higher than the 2nd highest offer.
I think the main issue is the lack of transparency and trust in the current bidding process for the buyer. If you send out "best and final offers", as a buyer, how do I know where I stand? What if I'm the highest bidder and you still send that. I don't want to bid higher if I know I'm the highest offer. I've said it before and I'll say it again, with this type of bidding war, there needs to be transparency and trust for the buyer. Otherwise there will be buyers that will be hesitant to put their actual highest. The last thing I want to do is bid against myself. The current process definitely benefits the seller and not the buyer. But maybe I'm only speaking for myself and I'm wrong about the general consensus.

You are completely right that the multiple seller counter offer for best & final offers benefits the seller.  The escalation clause is one way to try to limit overbidding.  If you want a fair transparent bidding process then an online auction needs to be set up where the clock gets reset to 5 minutes after the last bid so there is no snipe bids like you have on Ebay.  That way buyers would see have full transparency.  This would favor the buyers not the seller so not sure if you'll see from listing agents that anytime soon. My job as a listing agent is to get the highest price with a qualified possible as quickly and effectively as I can. I've been easily able to motivate/encourage buyer agents to have their buyers bid higher over the years where the top buyer just outbid themselves with the best and final counter.
yeah and I think in this type of market, it’s best to give your best offer the first time and leave it as is. That way you don’t play that game of bidding against yourself. If you win, you can say you win and didn’t play any games in doing so.

This

Offline newOC

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Re: Where the market is - Buyer Offers
« Reply #97 on: April 02, 2021, 05:34:01 PM »
Having bought and sold property many times over the years including recently, I can say escalation clause is a fools tool. At best it makes a seller raise an eyebrow and not care, at worst it hurts the buyer as the seller will ignore and take a straight offer from someone not trying to play games or an agent not trying to look smarter than they are.

No luck on Navigator.  My buyer bid $1.311m and then used an escalation clause going up to $1.321m with a $1,000 over the highest offer/counter.  Listing agent emailed me this late last night when I asked if the top buyer bid above $1.321m here was her reply...

"Yes, by a good amount over your max escalation amount."

It might hurt you. The listing agent can make use of your escalation clause and tell the other buyers that the highest offer is $1.321m, and you have to bid over that price. I am sure someone will do so.

Personally I think an escalation clause with a max limit doesnt make any sense.  Put yourself in the sellers position.  If a buyer says they will pay $X over the highest bid up to $Y amount, then I would just simply counter at $Y or higher regardless of whether I had other offers or not.  Furthermore would a thousand or two above the next bid really matter since it is literally a small fraction of the price of these homes?  Escalation clauses simply give the seller an advantage without gaining any for the buyer. 



I don't understand how it gives the Seller an advantage when the escalation clause is used on a best and final counter.  A best and final counter is what it means, all buyers are to provide their highest offers and the Seller does not come back with another counter above that the price that the buyers respond with.  I would argue that an escalation clause would be helpful to buyers as it may limit them from overbidding on a home if they already had the highest offer before the escalation.  I've had dozens of situations on the listing side when I sent out best n final counters to multiple buyers the top buyer would outbid themselves and be $20k-$40k higher than the 2nd highest offer.
I think the main issue is the lack of transparency and trust in the current bidding process for the buyer. If you send out "best and final offers", as a buyer, how do I know where I stand? What if I'm the highest bidder and you still send that. I don't want to bid higher if I know I'm the highest offer. I've said it before and I'll say it again, with this type of bidding war, there needs to be transparency and trust for the buyer. Otherwise there will be buyers that will be hesitant to put their actual highest. The last thing I want to do is bid against myself. The current process definitely benefits the seller and not the buyer. But maybe I'm only speaking for myself and I'm wrong about the general consensus.

You are completely right that the multiple seller counter offer for best & final offers benefits the seller.  The escalation clause is one way to try to limit overbidding.  If you want a fair transparent bidding process then an online auction needs to be set up where the clock gets reset to 5 minutes after the last bid so there is no snipe bids like you have on Ebay.  That way buyers would see have full transparency.  This would favor the buyers not the seller so not sure if you'll see from listing agents that anytime soon. My job as a listing agent is to get the highest price with a qualified possible as quickly and effectively as I can. I've been easily able to motivate/encourage buyer agents to have their buyers bid higher over the years where the top buyer just outbid themselves with the best and final counter.
yeah and I think in this type of market, it’s best to give your best offer the first time and leave it as is. That way you don’t play that game of bidding against yourself. If you win, you can say you win and didn’t play any games in doing so.

This

Offline USCTrojanCPA

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Re: Where the market is - Buyer Offers
« Reply #98 on: April 02, 2021, 06:05:21 PM »
No luck on Navigator.  My buyer bid $1.311m and then used an escalation clause going up to $1.321m with a $1,000 over the highest offer/counter.  Listing agent emailed me this late last night when I asked if the top buyer bid above $1.321m here was her reply...

"Yes, by a good amount over your max escalation amount."

It might hurt you. The listing agent can make use of your escalation clause and tell the other buyers that the highest offer is $1.321m, and you have to bid over that price. I am sure someone will do so.

Personally I think an escalation clause with a max limit doesnt make any sense.  Put yourself in the sellers position.  If a buyer says they will pay $X over the highest bid up to $Y amount, then I would just simply counter at $Y or higher regardless of whether I had other offers or not.  Furthermore would a thousand or two above the next bid really matter since it is literally a small fraction of the price of these homes?  Escalation clauses simply give the seller an advantage without gaining any for the buyer. 



I don't understand how it gives the Seller an advantage when the escalation clause is used on a best and final counter.  A best and final counter is what it means, all buyers are to provide their highest offers and the Seller does not come back with another counter above that the price that the buyers respond with.  I would argue that an escalation clause would be helpful to buyers as it may limit them from overbidding on a home if they already had the highest offer before the escalation.  I've had dozens of situations on the listing side when I sent out best n final counters to multiple buyers the top buyer would outbid themselves and be $20k-$40k higher than the 2nd highest offer.
I think the main issue is the lack of transparency and trust in the current bidding process for the buyer. If you send out "best and final offers", as a buyer, how do I know where I stand? What if I'm the highest bidder and you still send that. I don't want to bid higher if I know I'm the highest offer. I've said it before and I'll say it again, with this type of bidding war, there needs to be transparency and trust for the buyer. Otherwise there will be buyers that will be hesitant to put their actual highest. The last thing I want to do is bid against myself. The current process definitely benefits the seller and not the buyer. But maybe I'm only speaking for myself and I'm wrong about the general consensus.

You are completely right that the multiple seller counter offer for best & final offers benefits the seller.  The escalation clause is one way to try to limit overbidding.  If you want a fair transparent bidding process then an online auction needs to be set up where the clock gets reset to 5 minutes after the last bid so there is no snipe bids like you have on Ebay.  That way buyers would see have full transparency.  This would favor the buyers not the seller so not sure if you'll see from listing agents that anytime soon. My job as a listing agent is to get the highest price with a qualified possible as quickly and effectively as I can. I've been easily able to motivate/encourage buyer agents to have their buyers bid higher over the years where the top buyer just outbid themselves with the best and final counter.
yeah and I think in this type of market, it’s best to give your best offer the first time and leave it as is. That way you don’t play that game of bidding against yourself. If you win, you can say you win and didn’t play any games in doing so.

Some buyers don't want to offer up their best price right off the bat.  The maximum price in the escalation clause is the same thing as their max price so it's all the same thing really. 
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Offline USCTrojanCPA

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Re: Where the market is - Buyer Offers
« Reply #99 on: April 02, 2021, 06:10:50 PM »
Having bought and sold property many times over the years including recently, I can say escalation clause is a fools tool. At best it makes a seller raise an eyebrow and not care, at worst it hurts the buyer as the seller will ignore and take a straight offer from someone not trying to play games or an agent not trying to look smarter than they are.

No luck on Navigator.  My buyer bid $1.311m and then used an escalation clause going up to $1.321m with a $1,000 over the highest offer/counter.  Listing agent emailed me this late last night when I asked if the top buyer bid above $1.321m here was her reply...

"Yes, by a good amount over your max escalation amount."

It might hurt you. The listing agent can make use of your escalation clause and tell the other buyers that the highest offer is $1.321m, and you have to bid over that price. I am sure someone will do so.

Personally I think an escalation clause with a max limit doesnt make any sense.  Put yourself in the sellers position.  If a buyer says they will pay $X over the highest bid up to $Y amount, then I would just simply counter at $Y or higher regardless of whether I had other offers or not.  Furthermore would a thousand or two above the next bid really matter since it is literally a small fraction of the price of these homes?  Escalation clauses simply give the seller an advantage without gaining any for the buyer. 



I don't understand how it gives the Seller an advantage when the escalation clause is used on a best and final counter.  A best and final counter is what it means, all buyers are to provide their highest offers and the Seller does not come back with another counter above that the price that the buyers respond with.  I would argue that an escalation clause would be helpful to buyers as it may limit them from overbidding on a home if they already had the highest offer before the escalation.  I've had dozens of situations on the listing side when I sent out best n final counters to multiple buyers the top buyer would outbid themselves and be $20k-$40k higher than the 2nd highest offer.
I think the main issue is the lack of transparency and trust in the current bidding process for the buyer. If you send out "best and final offers", as a buyer, how do I know where I stand? What if I'm the highest bidder and you still send that. I don't want to bid higher if I know I'm the highest offer. I've said it before and I'll say it again, with this type of bidding war, there needs to be transparency and trust for the buyer. Otherwise there will be buyers that will be hesitant to put their actual highest. The last thing I want to do is bid against myself. The current process definitely benefits the seller and not the buyer. But maybe I'm only speaking for myself and I'm wrong about the general consensus.

You are completely right that the multiple seller counter offer for best & final offers benefits the seller.  The escalation clause is one way to try to limit overbidding.  If you want a fair transparent bidding process then an online auction needs to be set up where the clock gets reset to 5 minutes after the last bid so there is no snipe bids like you have on Ebay.  That way buyers would see have full transparency.  This would favor the buyers not the seller so not sure if you'll see from listing agents that anytime soon. My job as a listing agent is to get the highest price with a qualified possible as quickly and effectively as I can. I've been easily able to motivate/encourage buyer agents to have their buyers bid higher over the years where the top buyer just outbid themselves with the best and final counter.
yeah and I think in this type of market, it’s best to give your best offer the first time and leave it as is. That way you don’t play that game of bidding against yourself. If you win, you can say you win and didn’t play any games in doing so.

This

The escalation clause has worked for a few of my buyers and sellers recently. It saved my buyers thousands of dollars and got my sellers extra money.  There's nothing complicated or sleight of hand about an escalation clause, it's just that it's not used very much so many sellers and agents don't fully understand the concept.  It is not meant to be used on every best & final counter situation, best to pick and choose the use of it.
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Offline irvinehomeowner

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Re: Where the market is - Buyer Offers
« Reply #100 on: April 04, 2021, 07:57:46 AM »
So remember when we were discussing buying when you can afford it instead of waiting for a speculated downturn of prices?

This is one of the issues you have to deal with.

That’s why sometimes* it’s ok to buy when prices are perceived as “high” because you can actually get the home you want without having to compete with over bids.

*Obvious caveats apply.
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Offline qwerty

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Re: Where the market is - Buyer Offers
« Reply #101 on: April 04, 2021, 10:47:17 AM »
I think the escalation cause would be more effective if there was more of “premium” so to speak over the actual highest offer. If I is an escalation clause of +20 to 30k over the highest actual offer then I think more buyers would bite.

I would look at at extra 20-30k as a negotiation premium for the ability to get the house. In some respects you are already overpaying by buying in this market. What’s another 20-30k?

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Offline USCTrojanCPA

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Re: Where the market is - Buyer Offers
« Reply #102 on: April 05, 2021, 09:23:21 PM »
Offers going out shortly on these 2 Irvine homes...

https://www.redfin.com/CA/Irvine/81-Navigator-92620/home/7215381

https://www.redfin.com/CA/Irvine/6-Grass-Vly-92602/home/5771347

Let's see what happens on these homes.
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Offline nosuchreality

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Re: Where the market is - Buyer Offers
« Reply #103 on: April 06, 2021, 09:43:25 AM »
I think the escalation cause would be more effective if there was more of “premium” so to speak over the actual highest offer. If I is an escalation clause of +20 to 30k over the highest actual offer then I think more buyers would bite.

I would look at at extra 20-30k as a negotiation premium for the ability to get the house. In some respects you are already overpaying by buying in this market. What’s another 20-30k?

It's price relative.  $20-$30K can sound like a lot, but at $800K-$900K it's pretty much chump change.  It's a hard habit to break, but bickering over 1% can tank a lot of deals.  It's real money but like arguing over a penny when buying a Big Gulp.

The alternative is continued living in the joys of the ever growing apartment complexes or hunting for a small time landlord that understands landlording and isn't chronically in your sh&t or neglecting everything.

Offline Mety

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Re: Where the market is - Buyer Offers
« Reply #104 on: April 06, 2021, 01:31:19 PM »
So remember when we were discussing buying when you can afford it instead of waiting for a speculated downturn of prices?

This is one of the issues you have to deal with.

That’s why sometimes* it’s ok to buy when prices are perceived as “high” because you can actually get the home you want without having to compete with over bids.

*Obvious caveats apply.

So should people buy now also? ;D

 

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