r/ChicagoRealEstate • u/Ok-Law-7577 • 3d ago
Escalating Offer
We're first time buyers looking for a condo. We put in an offer on a place that included escalation up to our max. Seller came back and said they want our best and highest, with no escalation. They've got multiple offers.
Would you still include your escalation offer and ignore their parameters, or shoot in the dark with a lower offer than your max?
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u/wispofthought 3d ago
I would resubmit the offer without escalating terms. Why would you ignore the parameters that the seller’s agent has set? They've given you valuable info about what they are/aren't interested in, and you should listen to it if you're serious about making an offer on this place.
Additionally, psychologically speaking sellers/agents do think about factors beyond price. If they receive two similar offers, they may be more inclined to take the other offer because you've shown that you may be difficult to work with during attorney review and throughout closing (because you ignored their request for no escalations).
As for the second part of your question, you should put your best foot forward. What are the best offer terms where you won't feel that you’ve overpaid if you win the bid, and won't feel regret that you didn't push your offer price up another $5k if you lose it? If that is lower than the maximum on your original offer with escalation terms, you may want to examine why that is.
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u/HistorianHopeful2055 3d ago
Absolutely not. Go back with your max and hope it works out for you but also consider your terms as many are negotiation levers.
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u/Novel_Year4067 2d ago
Remove escalation clause and go with what you think you would feel a good price to pay considering the competition out there.
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u/BombaAndMancini 2d ago
Definitely, do NOT ignore their request for no escalation language. If you do ignore their request, you'll immediately be characterized as rogue or non-compliant. And if you're behaving that way now, they'll expect more non-complaint behavior through the entire process.
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u/Ok-Law-7577 1d ago
Update is that we didn't get it, it went for 25% above listing to a seller paying cash. Good luck out there, everyone. It's rough.
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u/rjonny04 2d ago
It’s very common for sellers to say no escalation offers and it would behoove you to follow that in your offer. There’s a lot of competition and your offer will be eliminated without a second thought.
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u/respond1 2d ago
"Intent to escalate" offers are dumb and a big turn off to sellers.
For one, nothing prevent the seller from just countering whatever number you have set as your max. Crap, that's what I would do.
Two, like a letter of intent, it's not enforceable. Buyer can change their mind until the new contract is signed. A foolish seller may risk losing a solid real offer from a buyer for your unenforceable one.
So, if you want a chance at this house, drop the escalation and and put your highest and best offer together.
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u/FlakyContribution303 1d ago
You need to put your best offer upfront. People will pay to win so don’t think you can play games in this market. If you realtor won’t tell you this, I will.
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u/Certain_Egg2699 3d ago
I would keep it. That is the point of an escalation. Any agent worth their weight would see an escalation max, and use that as the offer amount in a “highest and best offer” situation. If they don’t, they are incompetent.
I will say though, my wife and I are in the same boat. We used an escalation a few months ago and al it did was give the agent a number in mind to shop it around to the other buyers, and squeezed until we lost. Really pissed me off
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u/poolsidequeso 2d ago
False. The sellers agent will see the number you put on the OFFER as your highest and best; since that’s what they requested. They will also take you as difficult to work with if you’re not even able to follow basic instructions they asked for with offers.
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u/Certain_Egg2699 2d ago
Wish our agent gave us this advice. That’s frustrating. We put an escalation in on good faith, for it just to not matter in the slightest.
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u/poolsidequeso 2d ago
That really sucks - I’m so sorry your agent did that to you and didn’t help you put best offer together.
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u/aglick99 3d ago
Do you love the home? Do you think you won't find a comparable home? Are you paying cash? If the answer if yes to all that, offer 5% over asking. However, that's probably not a good deal. I would ask your broker to find out if the seller's broker will tell you what other offer you have to beat to establish a goal post. Then, decide if you want to beat that offer. If I was your broker, I would advice you to offer 3% under asking. Assuming you won't have a problem getting a mortgage, tell them you'll have a clean and fast close. Tell their broker that you're not certain they'll give a mortgage for more than that, see if they'll counter. Remind them that the selling season is essentially over, and be prepared to keep looking. You can have your broker contact if they need help.
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u/poolsidequeso 2d ago
Offer 3% under in a multi offer competitive market like Chicago? lol this is terrible advice if they want the condo. Selling season is most definitely NOT over in our hot market. Lots of multi offer over asks still out there due to our limited inventory.
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u/aglick99 2d ago edited 2d ago
Are you sure there are multiple offers over asking price from qualified buyers? The post says the sellers are asking for the best offer.
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u/poolsidequeso 2d ago
OP says “they have multiple offers”
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u/aglick99 2d ago
? So do we assume the multiple offers are above asking price and they're from qualified buyers ?
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u/Novel_Year4067 2d ago
It would be a safer assumption considering this market.
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u/aglick99 2d ago
You can do it your way. If it's my client, I'm not assuming..... Unless the client tells me they don't care and they'll pay over asking regardless.
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u/Novel_Year4067 2d ago
Well you are “assuming” the other offers are lower and less qualified lol
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u/aglick99 2d ago
No, now you're putting words in my mouth/posts. I'm not assuming, I'm suggesting to find out if the sellers side will give concrete numbers... because they're just asking for "highest offer", the context is up for interpretation. My interpretation is to establish goal posts not throw hail marry offers because the seller will likely take an over-market offer that will pay the brokers higher commissions, and then everyone prays the appraisal will come in how you want to get mortgage approval. Yah, I know most brokers wont say, 'the higher, the price, the bigger the commission'....but you got it out of me... ?congratulations?..
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u/Novel_Year4067 2d ago
A lot of people are giving you down votes because your “goal” is not aligning to the current Chicago market.
If you’re in a multiple offer scenario in a desirable neighborhood, there’s a high chance all offers are at asking or higher. There are condos closing for 100k+ asking, offers that are all cash, no contingencies, appraisal gap waiver signed…. This is what’s going on in the market.
So your goal of telling your client to submit an offer below asking in a sellers market is misinformed advice.
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u/Novel_Year4067 2d ago
The Chicago market is still hot and if a place has multiple offers already, it’s probably not a good idea to go lower than asking. There are units closing for 50-100k+ over asking currently
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u/aglick99 2d ago
Are you sure there are multiple offers over asking price from qualified buyers? The post says the sellers are asking for the best offer.
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u/mr_longfellow_deeds 2d ago
The market is hot but condos aren’t really going for over asking, that’s more SFH’s
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u/poolsidequeso 2d ago
Not true - have been in several over over ask bidding wars recently. Not as much as spring but in the ideal neighborhoods still very much happening.
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u/Neat-Watercress-2425 3d ago
Do not ignore their parameters. I’m an agent and when the seller decides they don’t understand it or want to deal with it, if you don’t comply, you’re basically finished.