Kelly Broaddus | eXp Realty | 888.446.5602 | Contact Kelly
Here are two buyer strategies that can give your offer an edge.
There are a couple of strategies that I usually have to explain to my buyer clients. These two strategies are appraisal waivers and escalation clauses. They are a little difficult to understand, but they can really give your offer an edge.
This doesn’t mean there won’t be an appraisal. The lenders almost always require this. This waiver means that you agree to pay the difference between the amount the home appraises for and the offer you’ve made on the home. You even can designate a specific amount over the appraisal that you’re willing to pay if you’re not comfortable paying the entire difference.
"Escalation clauses and appraisal waivers work best when used together."
For this clause, you tell your agent the maximum price you are willing to pay and how much over the highest offer you want to bid. Let’s say a home is listed at $400,000, but you are willing to pay $2,000 over the highest offer up to $450,000. Another buyer places an offer at $415,000, so now you would be paying $417,000. This lets you make sure you have the highest offer on a home without overpaying.
However, there are a few catches with this clause. Some agents aren’t willing to honor them, so have your agent check with the listing agent first. You also want to make sure the amount you pay over other offers is significant so that the seller knows you’re serious. You need proof of other bona fide offers as well. Escalations clauses are also best used in conjunction with appraisal waivers since they can put your offer way over the market value of the home.
If you have more questions about these two strategies or anything else real estate-related, feel free to give me a call. I’m happy to go into more detail and help you out.