No Regrets
In a Seller's market, don't settle for less than the best possible price and terms! We have the tools and strategies to help you attract the most motivated and capable buyer, as well as ensuring they'll see the transaction through all the way to closing. Be sure you understand the pros and cons of each of these strategies before we got to market so you won't under-sell or miss the opportunity to attract the best possible buyer for your home.
Multiple Offers
Whenever buyer demand exceeds available housing inventory, there's a strong possibility that you may receive more than one offer.
This strategy is most effectively implemented when following these six steps:
Price to attract competing buyers — at, or even below, the expected value in the market.
Ignite pre-market interest with a "coming soon" listing.
Create the FOMO of an auction-like atmosphere by only allowing showings within a limited window of time.
Pre-set a deadline for receiving offers.
When the strategy to generate multiple offers has worked, call for "highest and best" price and terms.
Negotiate your most beneficial deal with the most motivated and capable buyer.
Escalation Clause
An escalation clause is language inserted into a purchase offer for a home that’s intended to make sure you are the highest bidder. It’s typically used when you and your agent strongly believe your home will receive multiple offers.
An escalation clause states that your buyer will pay a certain amount of money above the highest offer you have received. It generally includes a ceiling cap to make sure the buyer hasn't agreed to pay more money than they can afford.
Typically, there are three distinct parts to any escalation clause that’s included in a real estate contract.
An Escalation Amount
The escalation clause will include the incremental amount by which the buyer chooses to outbid any higher offers.
A Price Cap
The price cap represents the maximum amount that the buyer is willing to pay for the property, or how high they’re willing to allow their offer to go.
Note: If an offer is submitted that is higher than the amount of one buyer's escalated price cap, their offer will be taken out of the running... but we will use it as leverage, unless other favorable terms keep it in consideration.
Proof of Bona Fide Offer
As your listing agent, we must be able to prove that another offer came in with a net purchase price higher than the best escalated offer.
Typically, we will send over a copy of the page(s) from the other buyer’s purchase agreement that shows the higher price and any net terms. Any identifying information for the other buyer will be redacted.
Appraisal Gap Waiver
This clause, especially when combined with an escalation clause that may drive the purchase price above the listing price, can be an enticing incentive for you to consider and accept the most motivated and capable buyer's offer over others.
An appraisal gap coverage clause is custom wording in the purchase contract that says the buyer will pay some or all of the difference between the appraised value and the contract price.
Their lender will likely not waive the appraisal contingency as part of the loan, as the bank controls that for the protection of the lending institution. So it is not insurance that we'll get that price, but rather an extra safety measure for some degree of protection against a failed deal due to an appraisal coming in under the agreed upon contract price.
Proof of the buyer's ability to pay the additional funds beyond their downpayment will be required.
Sight Unseen Offers
Some highly motivated buyers may be so incentivized to beat the crowd as to make a sight-unseen, as-is offer with no contingencies — which may create your best window of opportunity for a great price during the coming soon marketing period.
Off-Market Offers
Should you want to more discreetly market to a more selective group of buyers, it is possible to attract highly motivated purchasers without going to the MLS to get your best price... though most often the wider exposure of going to the traditional market increases the pool of motivated buyers and may attract even better terms.
Inspection Limitations
The home inspection is conducted in order to discover and report issues ranging from major concerns that need to be addressed right away (possibly by a specialist) to smaller items that you simply need to monitor. The inspector will classify the severity of each issue, which will help you order the items from most important to least important.
Sellers know that the potential exists for a costly second round of negotiations to resolve issues revealed during the inspection process — or even that you could potentially cancel the deal if the results are too costly to want to deal with.
Offering some reassurance by accepting some or all of the risks of what may be found the home inspection demonstrates that you are motivated to purchase and willing to limit the seller's risk of either possibility.
Rather than simply asking the seller to agree to your request to conduct and settle inspection findings, you may wish to make your offer more appealing by proposing a modification. Before or instead of asking the seller to negotiate, repair or come down in price, you may want to consider strengthening the appeal of your offer by implementing one or more pre-determined settlements of inspection findings noted here.
Spectrum of Limiting Inspection Variables
Completely waive inspections and accept the property in as-is condition.
Conduct inspections for your info only and accept the property in as-is condition.
Limit which inspections you conduct.
Place a dollar limit on any single item you may ask the seller to address.
Place a dollar limit on the total of the cost of issues you may be willing to absorb before asking the seller for anything.
Other Resources
The articles linked below provide several other helpful resources for you throughout your buying or selling process.