We’re in the hot spring market and buyers are out in full force. There are fewer houses for sale, which means buyers are having to compete with one another for homes. This leads to multiple-offer situations where more than one person is bidding on a home, and many buyers are walking away feeling frustrated.
Fortunately, there’s a simple trick that can help you win out against the competition. It’s called a price escalation addendum.
In this addendum, we write that you’re going to bid $1,000 higher than the highest bid (up to a certain amount). Let’s say your highest bid is $250,000, but you’ll bid $1,000 more than other offers up to the point of $259,000.
If the highest bid is $253,000, your bid automatically becomes $254,000. The addendum stipulates that the seller must show you the highest contract, though. It breaks the cycle of losing multiple-offer situations and helps you to win. It doesn’t always work, however, because the seller doesn’t have to play by our rules. They can simply counter your offer at $259,000 from the outset, for example. This may at least open up a negotiation.
Other times, all the buyers may be using the price escalation addendum. In that case, whoever has the highest max wins.
Regardless, it can still be a helpful tool if you’ve found yourself losing over and over again. If you have any questions or would like more information, feel free to reach out to me. I look forward to hearing from you soon.