Home Buying in Pleasant Hill>Question Details

Beesto, Home Buyer in Pleasant Hill, CA

Offering a price with an addendum that says "or $3000 over highest offer"

Asked by Beesto, Pleasant Hill, CA Mon May 14, 2012

Can you get out of this by simply rescinding your offer if the highest bid plus 3K is over your budget? Is this a good strategy? Cons? Why doesn't everybody do it?

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6
Neil Case’s answer
Beesto,

Personally I think this practice makes no sense at all. For the exact reason that Pacitia stated. Plus, did you put additional terms in that language that the seller would then have to prove to you what the next highest offer was? How do you know the seller is not going to just take you to the cleaners.

If I am the listing agent and I see an offer like that come across my desk I am for sure going to alert the seller not to take it all that seriously as there is a super high chance that a buyer making an offer like that is going to want to either cancel or not honor the "final" price.

Just offer whatever your highest and best offer is. No need for a maneuver like this. I think it hurts your offer. Bad idea.
1 vote Thank Flag Link Tue May 15, 2012
Not everybody does this for the precise reason you want to back out if there is no limit as to what the highest offer is, and it turns out to be more than what you can afford.

Not everybody does it because if you do state the maximum you can afford or would like to pay your price, by stating this in your addendum --- "or $3000 over highest offer with a cap of $___" then you've basically already told them what your best and highest offer is.

So why didn't you offer that in the first place?

And what would stop the seller from countering you at that price?
1 vote Thank Flag Link Mon May 14, 2012
Hi Beesto,
All good answers here and you can see why you need to put in a maximum amount ("up to $______) so you don't go over budget. With all of the mulitple offers, Buyers and agents are just looking for an additional edge to get your offer accepted. Probably putting in your highest and best offer is the best strategy and then increasing your good faith deposit to show your sincerity.

Good luck to you!

Carolyn
0 votes Thank Flag Link Tue May 15, 2012
What I don't understand here is why you would write this addendum if it's over your budget. NEVER write an over your budget! That is guaranteed to get you into hot water.

I confess to the fact that I have used this tactic in multiple offer scenarios. I do however place a stop...'up to _________dollars.' That way you will never go above where you want to be.

Good luck.
0 votes Thank Flag Link Tue May 15, 2012
Time out.

Beesto, you need a professional in your corner. This is the sort of thing that we pros do all the time, the same way that Matt Cain mows down opposing batters.

All the best,
0 votes Thank Flag Link Mon May 14, 2012
Hello Beesto,

It's not possible to simply rescind an accepted offer. It is, however, possible to put an upper limit on your escalation clause. Discuss it with your buyer's agent and come up with a strategy prior to crafting the wording of your escalation clause.

Kindest Regards,
Vickie Nagy, Specialist in Buyer Reprsentation
0 votes Thank Flag Link Mon May 14, 2012
If I were the listing agent, I'd recommend the seller counter at that buyer's top offer...unless another offer comes in that's even better. There are NO guarantees that a seller will counter a "relative" offer.
Flag Tue May 15, 2012
My husband wants to bid 475K and our realtor suggested a 462 offer with 5K over best capped at 475. My husband says anything over 462 plus the 5K would practically put us at 475 anyhow. But I'm thinking what if nothing is over, and they take the 462, now we've saved 13K. We think it will assess at $460 max. so we think 475 is a high bid (we have cash to offer over appraisal capped at 15K), but that with the bidding wars going on that 475 will be bid. The house is worth 475 to us compared to what we are seeing. What do you think? I just want all the advice I can get before we put in this important bid?
Flag Tue May 15, 2012
As Pacita wrote though, is it common for the buyer to just counter with your upper limit you've capped it at.
Flag Tue May 15, 2012
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