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Cheryl, Home Buyer in Florida

Bidding War.....Who says it has to be an exact amount?

Asked by Cheryl, Florida Tue Jul 17, 2012

I am just about to go into a Best and final Offer. I don't want to provide an exact offer and lose my possible dream home. I want to go in with "My best and final offer shall be $1000 above the highest offer for the property located at _____, but total price shall not exceed 189,900. Can this be submitted like this or is there a law stating a standard that has to be followed?

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In North Carolina, real estate agents are allowed to fill in the blanks on standard contract forms. Drafting a clause such as you describe is considered practicing law. An agent who is not an attorney who drafts such a clause would be considered to be practicing law without a license. You may want to consult an attorney. I have seen very poorly written escalation clauses that can have unintended consequences. There also may be other ways to improve your offer. Price is always important, but not the only consideration. The price doesn't matter on a contract that doesn't close.
0 votes Thank Flag Link Wed Jul 18, 2012
This is known as an escalation clause and there's no law against it here in North Carolina. though most agents seem uncomfortable with it because most don't do enough business to understand our contracts and what is and isn't permissible. You should add the following into your language ....$1000 above the highest bona fide offer for the property... If you prevail you should request a copy of the first page of the highest competing offer as evidence of the amount offered. This is also perfectly legal as our contracts clearly state that a Seller is under no obligation not to share an offers information.

Good luck.
0 votes Thank Flag Link Wed Jul 18, 2012
As Alan has said below, you would just include an acceleration clause or an escalation addendum as it's called out here with your offer. The way it works in Washington is you would put your offer amount such as $182,000 and then you would put in the that you will increase your offer by $1000.00 if before the seller accepts your offer they receive a higher offer then yours. If the seller says that they did receive a higher offer then yours they would have to show you that offer before they could increase your offer $1000.00 above it. This is also off of the net of the offers. For example if your offer is $182,000 and your asking for $3,000 in closing costs then your net offer is $179,000.
0 votes Thank Flag Link Tue Jul 17, 2012
Here's a good one for you:
Two guys, both vieing for the same property, use the same line; "$1000 more than the other guy."

So, ask yourself; why won't this work?

Well, the reason is, that Offers are supposed to be CONFIDENTIAL!!!!
Oh, you think that only YOUR offer should be confidential. right?

What you are proposing is borderline FRAUD>
But then, that only applies if the OTHER GUY does it; right?
0 votes Thank Flag Link Tue Jul 17, 2012
Cheryl,
We have an addendum in our MLS that spells this out very precisely and requires the competing offer be provided as proof. You might check with your agent to see if they have something similar.
One last thought, if you are buying from a bank or other institution, they tend to reject these. Private parties are more persuaded by the extra $1000 if all other terms are acceptable.
One question I always ask the other agent, apart from price what terms are your seller's most interested it; a quick or lengthy close, their choice of vendors for title & closing, keeping or leaving any fixtures or appliance? Sometimes price isn't the difference maker.
0 votes Thank Flag Link Tue Jul 17, 2012
you can submit it that way... it's called an acceleration clause (ie: $1,000 more than the "other guy")... but it can backfire. Occasionally I have seen a seller offended by this style of offer (why don't they just pick a number... it's unfair to the other guys)...

but I've also seen it work.
0 votes Thank Flag Link Tue Jul 17, 2012
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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