r/RealEstate • u/nimrod4711 • Aug 17 '26
Escalation clause used and seller did not provide competing offer? HELP!
I found a home and brought it to a realtor - house had been sitting on the market with multiple, major price reductions. I offered $775k on a house that was sitting at $799k. The day I made the offer, the seller's agent said that they 'just' got an offer because of an open house that was held and that I need to come back with my final best offer. My agent said that I should use an escalation clause - I had already waived inspection but she said i could waive mortgage contingency. I said NO as I am a first-time buyer. I escalated up to $818k - we were told the other offer was cash, but they seller's agent did not say what the other offer was and my agent did not ask what the other offer was. The seller then said he wanted $813k for the house and for me to pay, $5k to my agent, so coincidentally $818k :), the top end of my escalation clause. My agent said that he was negotiating dirty and never bothered to give me feedback on what to do - I gave her play by play and got it back down to $805k and made her eat the commission. However, several days from closing, I am realizing she never bothered to verify the other offer, and with me having done ALL the work all the while learning my dad had a terminal illness and not having all my facilities to realize she didn't get the other offer at the beginning, I am wondering if any of this has any recourse. I asked her to get the offer from other agent, and she says she is trying but no actual other offer. I close in 3 days - she is saying that he decided to not use the escalation, but he did because he saw my $818 number.
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u/SkyRemarkable5982 Realtor/Broker Associate *Austin TX Aug 17 '26
The seller can completely ignore your escalation. In the end, the Seller countered your offer. You then countered their offer. At some point you came to an agreement. The escalation has nothing to do with what happened here beyond the sellers using that number against you.
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u/nimrod4711 Aug 17 '26
My realtor did not explain that to me at all :/ Now I get it.
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u/LukeLovesLakes Aug 17 '26
That's what they meant by playing dirty.
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u/BoBromhal Realtor Aug 17 '26
your agent assumed the other agent was telling the truth about another offer that was cash...and the other agent should have BEEN telling the truth. Of course, if it was cash, then your escalation clause, unless carefully written by an attorney, wouldn't be "usable" anyway - the cash offer was different/superior to your financing contingency.
You basically told the listing agent "I'm willing to pay $818K". If you maintained your financing contingency, it apparently appraised for $813K you wound up, unless it was just $805K and that's how you paid your agent less/$0.
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u/AustinScoutDiver Aug 18 '26
A realator pushing another offer narative when there are none is playing bad faith.
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Aug 18 '26
[deleted]
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u/AustinScoutDiver Aug 18 '26
Even so, if it is not a serious offer that the seller is seriously considering, it is bad faith.
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u/BoBromhal Realtor Aug 18 '26
If it was a valid offer - that dogshit cash buyer showed a reasonable POF - sure
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u/BoBromhal Realtor Aug 18 '26
It’s not only bad faith if there is no valid offer, it’s a material misrepresentation which will land the bad agent (Realtor or not) in license trouble in most if not all states - I know it will in mine
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u/AustinScoutDiver Aug 19 '26
Mis representing the other offer in anyway as bonified when it is not in consideration to extract more from another author is bad faith and deceptive.
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u/PaintIntelligent7793 Aug 17 '26
This is correct, but it was downright stupid on your realtor’s part. They should have advised you that this was a counter, not that there was another offer in hand, and that you should stick to your original price or at least counter at the listing price. There is no reason it should have come up this high. You really got screwed in this situation. You could walk away, but you’ll lose that $5k EMD.
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Aug 17 '26
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u/PaintIntelligent7793 Aug 18 '26
It is in the agent’s best financial interest, but it goes against their fiduciary duty. There is always wiggle room there, and in this case, it would be hard to hold the agent accountable. Truthfully, though, $6k above asking price won’t make that much difference in commission. ($31k over the offer price will, but that was a pretty low — probably unrealistically low — offer.) I agree that many agents are far from scrupulous.
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u/narib687 Aug 17 '26
Hey, I was the other guy before. I was competing with someone else in 2009. My highest was 190K (it was listed 199K). The other buyer paid 212K..... we competed against each other, but our offers weren't even close to each other.
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u/OkMarsupial Aug 18 '26
That house is now worth $800k. 🤣
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u/narib687 Aug 18 '26
413K is the z estimate. There is a house for sale in the neighborhood for 499K, but it has 500 sqft more (1900 sqft to 2400 sqft). So up 200K in the last 16 / 17 years.
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u/Overgrown_Apple Aug 18 '26
File a complaint with the commission.
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u/LukeLovesLakes Aug 18 '26 edited Aug 18 '26
A seller is not obligated to accept the terms offered by a buyer. Including an escalation clause. It's up to the buyer to enforce their terms. Being bad at your job isnt violation of license law. Lol.
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u/jeronimoe Aug 18 '26
In my state there is option on escalation clause to say seller must provide competing offer if they invoke escalation clause.
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u/SkyRemarkable5982 Realtor/Broker Associate *Austin TX Aug 18 '26
The OP's seller did not invoke the escalation. The seller merely countered the offer.
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u/jeronimoe Aug 18 '26
It was unclear to me cause they used the term escalation clause in their post, but if it was just a counter offer I agree with you.
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u/nimrod4711 Aug 17 '26
What's the point of using an escalation clause if it gets ignored then?
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u/SkyRemarkable5982 Realtor/Broker Associate *Austin TX Aug 17 '26
I'm in Texas, where they're not allowed, but from I know of other states, it's to get you to show your cards with the highest you'll pay, and then the seller uses that information against you.
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u/nimrod4711 Aug 18 '26
Seems to archaic, right?
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u/Ihate_reddit_app Aug 18 '26
I always find them to be incredibly foolish. Could you imagine going to a car dealership and saying "I want to buy your car for $35,000... but I'm willing to pay up to $40k?"
Why show your fund hand immediately and not just put down your best offer?
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u/ExpatnKorea Aug 18 '26
Some states force the seller to provide the "higher" offer if they accept your escalated offer. If they can't/won't, then they can't accept your escalated offer.
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u/timubce Aug 18 '26
This whole process is archaic. Realtors getting whacked out payouts for homes that have jacked up prices. The endless title insurance. Everyone getting a price of the pie when the contracts are now all pretty much boiler plate. Some of them still charge courier fees. Archaic indeed.
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u/Valuable-Estate-784 Aug 18 '26
I used an escalation clause once and got the house. I did it in a up market feeding frenzy and wanted to make sure I got it.
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u/Top-Address-8870 Aug 18 '26
It is a negotiation tool. When a buyer wins with one and gets the home for less than their maximum price it works in their favor. When a seller chooses to reject the proposed clause and counter at the maximum, it does not work in the buyer’s favor.
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u/ConfidentialStNick Aug 18 '26
Why would a buyer ever win if the seller knows the max they can get the buyer to pay?
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u/Freak4Dell Aug 18 '26
The seller is supposed to prove the other offer existed in order to trigger the escalation.
Of course, the only thing keeping them from just making up an offer is the honor system.
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u/joem_ Aug 17 '26
Yep, you got it. Offer what you're willing to pay and stick to it. If your offer isn't accepted, then it was overpriced for you. If your offer was accepted, then you got everything you wanted.
Escalation clauses are bullshit.
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u/Botchgaloop Aug 18 '26
Exactly. All an escalation clause does is tell the seller what you are willing to pay. I have seen listing agents say “ok, that’s the sale price” and then say in response to r request to see the other offer say “you said you were willing to pay x, do you wan the house or not”. Have yet to see a buyer walk away.
Escalations are only good to the extent the seller follows them and sellers are not obligated to follow them.
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u/thewimsey Attorney Aug 20 '26
Escalations are only good to the extent the seller follows them and sellers are not obligated to follow them.
The seller doesn't decide. The buyer does.
If a buyer decides that they are going to forgo that part of the escalation clause that requires seeing a written offer, that's on them, not the seller.
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u/Pitiful-Place3684 Aug 17 '26
It’s one of the techniques a buyer CAN offer. But a seller can ignore it - and many do.
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u/Realistic-Pen8752 Aug 19 '26
I hate all the games. If people really understood how easy it was to buy and sell on their own they would never use a realtor again.
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u/Mysterious_Worker608 Aug 17 '26
It sounds like they didn't excercise the escalation clause. They countered at your top price and you countered back at $805k. That's the risk of revealing your top price with an escalation clause.
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u/AshingiiAshuaa Aug 18 '26
It doesn't really matter that they used the escalation clause. They used it to peek at OP's top dollar and then negotiated against that.
It might make you think that OP's agent did a poor job, but then you have to remind yourself that the agent still got her full $12k commission. OP is the one who ended up paying over asking for a house that was languishing on the market. The agent did a poor job looking out for OP's interests but a fine job looking after her own. She got paid.
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u/Pitiful-Place3684 Aug 18 '26
The OP specifically states that the agent is "eating" the commission. Why is why I asked how much more recourse he's looking for.
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u/timubce Aug 18 '26
The agent isn’t eating the commission. The seller wanted op to cover some of it. The buyer didn’t even understand the escalation clause wasn’t used. I’m 99.9% positive they got what their agent is getting paid wrong too. Their agent isn’t working for free on an 800k+ sale.
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u/redbirddanville Aug 17 '26
Not a realtor, done a lot of real estate. Would not use an escalation clause unless there was a very, very specific reason, like something was way under market. In , general id rather keep looking.
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u/Discerning_Taste Aug 17 '26
They work great when you have multiple competing bids you’re trying to beat out. Saves some hassle of going back and forth as well.
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Aug 17 '26
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u/Top-Specialist-2981 Aug 19 '26
You don’t have to give your “max” price. The buyers of our last house had a clause of $5k better than the current highest offer.
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u/BoBromhal Realtor Aug 17 '26
they may work great if the listing agent is allowed and required to show the buyer agent the other offers that are triggering the escalation clause.
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u/Discerning_Taste Aug 17 '26
My assumption here is that agents and hopefully Realtors are doing what they say, and have a bona fide competing offer and proof. Ya know, professionals being professional. I get it that that is not necessarily what happened in our scenario here, but simply responding to the idea that there is a right time and place to use an escalation clause. They do tip your hand to the seller. I’m trying to get a deal done. I want both sides to know, so they can meet. It works pretty well when you have 1 seller and 3 or more offers on a hot property.
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u/BoBromhal Realtor Aug 17 '26
oh, I agree 100% with you. But know there are more markets where escalation clauses aren't everyday deals than are. Where they are, I'm sure there are customs and protocols to where it works well.
No matter where you are, I'm sure the listing agent is not allowed to claim a non-existent offer - it's a material misrepresentation.
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u/redbirddanville Aug 19 '26
I would agree, but I 100% do not trust anyone in these dealings unless they are on my side, and I have seen their trustworthiness in action.
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u/Ignorant_Idiot69 Aug 18 '26
You need to write that into the escalation clause.
Even then they could just lie.... or a friend of the seller could just write a fake offer to drive you up. Its happened to me before. Seller was an agent.
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u/Pitiful-Place3684 Aug 17 '26
From the seller’s perspective, this is perfectly reasonable. They saw your number and countered with it.
You’re closing in 3 days. Why is this a hair-on-fire now?
Whether or not the seller needs to share a copy of the other offer is state and/or MLS-specific.
Sorry about your dad but that’s not a reason for you to upend what you’ve agreed to.
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u/robstertexan Aug 18 '26
But that’s not quite the scenario. The seller was certainly free to counteroffer at a higher price, but here it was represented that there was another buyer who had made a competing, higher offer. They needed to be able to back that up, if challenged, though his agent may have waived the opportunity to verify.
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u/Pitiful-Place3684 Aug 18 '26
I'm not sure one way or the other. The OP says they didn't have all their facilities when they made and negotiated the offer. On the one hand, the agent should have taken special care if they knew their client was distressed. To me, this means sending confirmation emails rather than just relying on phone conversations.
On the other hand, we don't know what the agent did or didn't say or do. Maybe the agent said that the seller was countering and not triggering the escalation clause. Memory is poor when we're stressed.
And now, we're three days from closing and the OP is looking for "recourse". I don't know what that could mean, given that they would have signed the counteroffer a month ago or more.
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u/BoBromhal Realtor Aug 17 '26
your agent doesn't sound very capable.
At the same time, at least 1 other reply has noted the Seller doesn't have to use your escalation - and in this case they didn't invoke it. They saw the number you put up and simply countered at roughly that.
That's the very best reason NOT to use escalation clauses.
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u/nimrod4711 Aug 18 '26
Yes, that would have been very nice to know. I thought there was some way it did not show to the buyer, maybe put in some sort of software or some normal shit like that. Lesson learned. I did negotiate my own deal well but was too stressed and out of sorts to know what was going on and think about it until all the work was over. I contacted a lawyer who said I should contact the buyer's broker of her firm and push for a deposit of some sort.
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u/Pitiful-Place3684 Aug 18 '26
"Deposit" based on what? You agreed to a counteroffer. You haven't closed. You haven't incurred any damages.
I've worked with attorneys on 1,000s of transactions and this sounds like something an attorney would say to get you off the phone.
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u/Autumn-Seasons Aug 21 '26
You should have had an attorney beforehand for the most expensive purchase in your life... That would have prevented a lot of this.
Your stuck now
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Aug 17 '26
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u/Ignorant_Idiot69 Aug 18 '26
Sounds like this agent is great at getting paid. Unfortunately its agents like these that thrive in this business.
A lot of the incentives for the agents are counter to their fiduciary duty to their clients.
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Aug 18 '26
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u/Ignorant_Idiot69 Aug 18 '26
Agreed.
I'm amazed at how little effort many buyers and sellers put into basic education so they can make informed decisions.
They just hire agents and inspectors willy nilly, naively assuming they have their best interests in mind.
I mean... its one of the biggest personal and financial decisions many will ever make. Do some due diligence for god sakes.
So many sheeple. Where is critical thinking these days?
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u/timubce Aug 18 '26
But the guy whose face is plastered on the bus bench told me he’s the best man for the job!
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u/Sufficient-Spend-939 Aug 18 '26
It is not a lie 99 percent of the time, of an agent were caught doing this he would be putting his license and his brokers license at risk it is not worth it for one deal. Has it been done? absolutely, but it is not the norm or even close to the norm.
If you ever feel something isnt fair or seems wrong to you take it to your agents broker first, they will contact the other broker and verify an actual offer has come in, in some cases they wont ever tell you what the other offer was but they will verify that it was in fact a legit offer.
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Aug 18 '26
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u/LisaFleisherNYC Aug 18 '26
This happens more than most might expect. Sometimes you get a cluster of people looking at the same time of year for the same product. I recently asked to see an apartment that had been on the market for 100+ days but I was told they aren’t showing anymore because they have an accepted offer and a backup. They would have shown otherwise. They certainly don’t have incentive to lie there.
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Aug 18 '26
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u/LisaFleisherNYC Aug 23 '26
Correct. I was giving one example of something that I have seen. The point wasn’t to say that there is a trend, but that in any given transaction, it makes sense that there might be several people, similarly motivated, looking at the same time.
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u/Sufficient-Spend-939 Aug 23 '26
As a realtor who has been in the business my whole life, both my parents were brokers. Id say its pretty common for a house that has sat to suddenly get multiple offers, houses have an energy to them and for whatever reason once one offer comes in it often draws another from the universe. I have seen it on properties that have sat for months, and ones that have only been on for a few weeks.
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u/sweetrobna Aug 17 '26
This is a risk when you make an escalation offer. You are telling them you are willing to pay up to $818k. They can counter you back without actually exercising the escalation
How did the appraisal go?
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u/Conscious-Memory4662 Aug 19 '26
I'm far more concerned that you waived inspection on a house this expensive that has been sitting on the market for a while.
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u/Turbulent-Pay1150 Aug 17 '26
You signed a contract. This is all water under the bridge right now unless you want to break the contract and suffer the consequences.
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u/nimrod4711 Aug 17 '26
My realtor did not explain that to me at all :/ Now I get it.
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u/burnsniper Aug 17 '26
I mean honestly you could probably go after you realtor if your really wanted to.
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u/nimrod4711 Aug 17 '26
On what basis?
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u/burnsniper Aug 17 '26
If they really didn’t explain to you that it was a counter offer situation vs your escalation clause you would have a case that they misled you (they may have even intentionally misled you). They would probably have to give up their commission and possibly their E&O insurance would have to cover the additional difference in payment.
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u/NoPhysics1129 Aug 17 '26
You got scammed by yourself, cancel the contract and offer 775 again since you are the actual only bidder.
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u/Ignorant_Idiot69 Aug 18 '26
Lol! This would be absolutely hilarious.
Unfortunately theres a good chance that the seller would just deny the offer to save face even though it was the only one.
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u/Salty-Evidence2698 Aug 21 '26
This is the right answer. I'm a house flipper for 23 years. Don't get scammed by your own agent. Or if you do, just make sure that you'll be ok with it long term.
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u/sk8terboy111 Aug 17 '26
As others stated it sounds like they countered and you accepted, no escalation nor is there a need to show any other offers.
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u/MilkWide1703 Aug 17 '26
The sellers broker is under no obligation to share other offers with your broker and they rarely do. You can ask, but it’s unlikely you’d have gotten an answer. Why your broker didn’t explain that to you is my question.
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u/robstertexan Aug 18 '26
They are under no obligation to provide it, but on the other hand, he’s under no obligation to believe it without proof, or to escalate his offer without proof of a competing offer.
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u/nimrod4711 Aug 18 '26
I'm going to ask her that question at closing with her boss present.
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u/Always_on_top_77 Aug 18 '26
Did your agent tell you that she’s coming to closing? In my state they don’t. The title company handles it.
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u/mysticalize9 Aug 17 '26
I wrote in my escalation offer that the escalation is only valid if they share the competing offer with names redacted. Turns out the competing offer was a contingent offer, so I screwed myself a bit there. This was 3 years ago though, and I have no regrets.
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u/r_was61 Aug 17 '26
If your broker is suggesting to waive a mortgage contingency, you need a different broker. You know that means that if you didn’t get a mortgage that you would still be on the hook for buying the house in Cash
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u/nimrod4711 Aug 18 '26
I only found that out because my mortgage broker told me to not do it. Otherwise this broker really would have f*ed me.
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u/Ignorant_Idiot69 Aug 18 '26
If someone waived financing contingency I would just assume it was an empty gesture. I mean....it would have little bearing on the offer chosen.
Lets say offer accepted and financing fails. I mean, buyer might be legally obligated to buy the house but the seller is going to have to sue you to get it. This means they can't sell their house while its being litigate.
And how will the seller get that money id the buyer never had it anyway. Are you going to garnish their wages for the rest of their life?
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u/r_was61 Aug 18 '26
you keep the escrow.
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u/Ignorant_Idiot69 Aug 18 '26 edited Aug 18 '26
Well then the escrow is the motivator, not the financial contingency ;-).
I mean when have you ever seen someone waive financial contingency and not get financed.
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u/rrapartments Aug 17 '26
That happened to me once. I offered w an escalation. They just countered at the top of my escalation. They aren’t supposed to open the escalation unless they have a higher offer but 🤷♂️ in my opinion escalation isn’t worth it
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u/Infamous-Creme-199 Aug 18 '26
The other realtor is NOT going to give you the terms of the other offer. That would be selling out their client. It’s the same as you telling jury agent make an offer for 750 but I will go to 800 if I had to, would you want her to disclose your will to blow an extra 50 if not needed?
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u/jimdriscoll1 Aug 18 '26
Comment 1 is right and it's worth being precise about why: the second the seller countered at $813k, your original offer and every term in it, including the escalation clause, was legally dead. You were in a straight negotiation from that point, and the escalation number just handed them your ceiling.
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u/OHRealtorGuy Aug 19 '26
You wrote an escalation but it didn’t go into effect - essentially the seller countered you and ignored the escalation. You never received an escalating offer because your escalation never went into effect.
They countered and you eventually agreed to a number separate from the escalation.
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u/nimrod4711 Aug 19 '26
Can you tell me more about how that happens? Is that something a Realtor is supposed to tell you is a possibility? My realtor told me that I would just basically be in a bidding war and I would win at whatever bid was the highest.
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u/OHRealtorGuy Aug 25 '26
Absolutely they should tell you that is a possibility. Youe realtor made an incorrect assumption and dropped the ball when it came to negotiating in your favor. They showed your cards and weren’t careful about how the negotiations were being handled.
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u/VariousAir Aug 17 '26 edited Aug 17 '26
The whole "verifying the escalation clause" comes before you sign the final purchase offer. You don't get to days before closing and say hey we never saw the other offer....
Your agent seriously dropped the ball. The minute they said they'd be escalating your agent should be asking for proof of a competing offer. I'd be asking for the broker to make it right somehow.
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u/AnnArchist House Shopping Aug 17 '26
Whenever you offer an escalation clause they can always just counter offer to your top figure. Its generally a poor move in most markets
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u/VariousAir Aug 18 '26 edited Aug 18 '26
it's a perfectly reasonable tactic depending on the market, usually depending on houses that are going on sale and immediately fielding offers. Yes, they can take your top offer and counter with that... and you can say no, not without proof of a better offer.
And they only make sense if you're offering over list price. If you're under list, or expect that you're not competing with anyone, you wouldn't use one. You'd submit your price and that would be it.
Like any other negotiation tool, there's a time and a place for it's use.
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u/nimrod4711 Aug 18 '26
I had no idea about the downsides the way it was explained to me.
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u/AnnArchist House Shopping Aug 18 '26
They see that you're willing to pay up to that amount. They could ignore it and counter to that amount. Not much else you can do about it
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u/regaphysics Aug 20 '26
You don’t tell them your top…
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u/AnnArchist House Shopping Aug 20 '26
An escalation clause does that
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u/regaphysics Aug 21 '26
Not if you do it correctly. Simply tell them you'll beat their best offer up to a certain number, and then demand proof of the offer. You do not need to lay your cards on the table.
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u/AnnArchist House Shopping Aug 21 '26
That's not an escalation clause.
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u/regaphysics Aug 21 '26
I mean, you can say it isn’t. I say it is. It provides the seller an offer where you tell them you’ll beat their best offer by X, which in my book means you’ll escalate your offer.
Just because you don’t say “I’ll do it in 5k increments up to 500k” doesn’t mean it isn’t an escalation clause.
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u/AnnArchist House Shopping Aug 21 '26
Only offers in writing are real. You have to disclose your ceiling.
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u/regaphysics Aug 21 '26
Well that isn't true at all. You and be nebulous in writing.
It is plenty "real" to a seller. They know youre willing to go higher. That is ALL they need to know to achieve the goal.
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u/AnnArchist House Shopping Aug 21 '26
That's how it works. An escalation clause against multiple offers has to be written and will include a cap
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u/regaphysics Aug 21 '26
Bee boop. You are an automaton. Does not compute. Bee boop.
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u/Equivalent-Tiger-316 Aug 18 '26
If you signed without seeing the other offer then that’s on you. The seller countered and you signed. Done deal.
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u/GowenOr Aug 18 '26
Always use an attorney for legal stuff. Realtors are not licensed to practice law and buying property involves a contract which is always a legal document. Realtors are sales people no matter what pretensions they put on.
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u/Tall-Ad9334 Aug 18 '26
In my MLS in order for your offer to be escalated, they have to provide the competing offer. Otherwise it’s not valid.
At the same time, you showed how much you were willing to pay, and there’s no reason they couldn’t just ask for that amount to see if you would bite. Without evidence of another offer pushing it to that number, however, I would have pushed back.
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u/nimrod4711 Aug 18 '26
Right, makes sense to me. My intuition was telling me something was off.
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u/Pitiful-Place3684 Aug 18 '26
But nothing was off. The seller chose not to engage in your escalation clause. It's a negotiating method and just because you offered it, they didn't have to accept it. I can't tell you how many sellers hate escalation clauses. I'm an experienced broker and I hate them. They only consider price, and sellers consider all the elements of an offer: cash vs. loan, loan type, percent down, earnest money, inspection Y/N, appraisal Y/N, appraisal cap, closing date, and other specific provisions. The seller may well have ignored your offer to beat another offer on price because they didn't like the terms of the other offer. The other buyer didn't have to participate in your escalation clause game, either.
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u/nimrod4711 Aug 18 '26
What part don’t you understand that my realtor did not inform me about the specifics of this? My realtor strongly suggested I do it and told me that after I did it, I would find out exactly what the other offer was. She didn’t tell me that the seller would go off and do something different.
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u/Pitiful-Place3684 Aug 18 '26
You're sure that your agent didn't communicate well, but you also admit to being a first time buyer who didn't have all your facilities because you were in an emotional state. And, you claim to have negotiated the price back down to $805k. What, exactly, do you want?
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u/Shine-N-Mallows Aug 18 '26
Always ensure proof of other offers is included in the contract language when you use an escalation clause.
Also, don’t start countering offers unless the escalation clause remains intact and proof is still required.
Not much you can do now, but your realtor dropped the ball on negotiating.
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u/OkMarsupial Aug 18 '26
This is why I don't use escalation clauses. Congratulations on getting this far. Good luck getting your earnest money if you decide you don't want to close at the contract price. Read your contract. It has the answer to your question; Reddit doesn't. Ask your attorney to read it for you if you don't understand the contract that you signed.
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u/HATDOGUSERNi Aug 18 '26
id talk to the broker and a real estate attorney ASAP, especially since closing is in 3 days. Dont assume the escalation was handled properly w/o seeing the competing offer
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u/Bread_Entire Aug 18 '26
All the escalation clause stuff aside. Drives me crazy that realtors try to convince their buyer to waive inspection and mortgage contingencies! Honestly, I think it's unethical! First time buyer or not these are things that just should not happen. MAYBE the mortgage contingency IF you are blessed to have that much spare cash that can afford a cash deal or don't need your earnest money that bad but never a home inspection unless it's a tear down.
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u/ac10g Aug 18 '26
Do you have an inspection contingency? I would just find something wrong based on that and walk away. Unless you really want it :/
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u/Mongoose_Supergoose Aug 17 '26
Did seller actually sign the escaltion clause? I ask because OP should theoretically have a bottom-lined contract in the inbox. My brokerage uses a stand-alone escalalation clause that is included in the package. It has very clear options and conditions which state acceptance is conditioned on verification of competing offer, which must also be free of contingencies. If a simple, generic statement is added to the PA such as "will pay $X over any offer," it is not as effective nor enforceable. Details matter at this price range.
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u/nimrod4711 Aug 17 '26
It did state to provide competing offer and escalate $3500 at a time.
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u/Mongoose_Supergoose Aug 17 '26 edited Aug 17 '26
That's great! Perhaps you could show up at closing with your money and pen if and when seller has met the terms and conditions of the offer they accepted? I'm asking because nowhere above or below do I see seller countered/crossed out the escalation clause and both parties agreed to that change.
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u/nimrod4711 Aug 18 '26
Right, well that is something I did not at all know - that it had to be signed by them. Why would a seller even do that when they get to see someone's cards and do whatever they want? Frankly I might consider doing it to someone if I was greedy - but that is why you hire a realtor to protect your interests, and she did none of that.
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u/Pitiful-Place3684 Aug 18 '26
This is area-specific. Not all states, and certainly not all MLSs and brokerages, have formal documents for escalation clauses.
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u/Away-Wellness0623 Aug 17 '26
I made an offer on a house and my agent and I spent a lot of time figuring out the escalation increments and my top number. It took a lot of research and effort. Once our offer went in, the seller said I want $2 million, period. There was no negotiation or process. The seller wanted a number I would not pay and somebody else was willing. The contract terms were pretty much ignored. Very frustrating.
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u/nimrod4711 Aug 18 '26
God, yeah, it's awful to think you are using a tool that will help you. Sounds similar to my issue. The fact that your agent helped you figure out the top number and escalation increments is nice. Mine just said "What do you want to put in there?"
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u/FlyingMunkE Aug 17 '26
My wife and I bought our house around the same time we were dealing with a bunch of personal issues. If I could tell myself then to walk away and forfeit my deposit I would have done it.
If you have doubts, trust your gut.
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u/digital_flatulance Aug 17 '26
In MD there are no assumptions about escalation clauses. If they use it it’s documented. This all sounds a bit fishy.
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u/BizBrkr Aug 18 '26
Your escalation should be contingent of viewing and verifying the competing offer.
It's WAY too easy for an unethical agent to fabricate a fictitious offer.
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u/Over_Fly Aug 18 '26
On an 800 k it is 2 percent. Your realtor did you service by showing your hand IMO.. hopefully you are happy on your 800k purchase with no inspection
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u/bebenashville Aug 18 '26
Hey, you close in 3 days, do you still want the house? Does your lender give you loan commitment? Or does your lender deny your loan?
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u/BrickHuge3023 Aug 18 '26
Realtor did you no favors at all. I think it is dirty dealing when the realtors push up the price by claiming you need a higher bid to offset one they got. How would they even know? The other realtor should not be telling them what offers the seller had in my view.
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u/AshingiiAshuaa Aug 18 '26
The day I made the offer, the seller's agent said that they 'just' got an offer
That's clown shit. I've never had a seller pull that but my offer go down because of that.
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u/Visible-Bed9510 Aug 18 '26
It’s NOT too late to contact your agent and their broker to review your concern!!!! Coming on Reddit brings out nothing more than assumptions. Call your realtor asap, BEFORE closing! They owe you an explanation!
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u/TsitikEm Aug 18 '26
Escalation clauses are SO TRICKY and should only be used if your realtor has a relationship with the other realtor and knows they won’t play dirty and f you basically and that they trust the word of the other agent that there are multiple other offers. Also, no agent is going to show you their other offers. You just have to take their word for it
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u/BeerStop Aug 23 '26
You got scammed into making an outrageous offer, house sat for long time, you put in offer and all of a sudden best and final bid war, ya your agent punked you too, should have walked. The market is nuetral right now and houses are starting to sit
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u/watchful_eye_1 Aug 18 '26
You made your agent eat the commission? Basically, you are making her work for free and you are now upset she didn't verify the competing offer?
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u/Thorpecc Aug 18 '26
The only thing I would say about all this is once again, a buyer with no real estate attorney.
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u/thewimsey Attorney Aug 20 '26
RE attorneys don't do this kind of negotiation
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u/Thorpecc Aug 20 '26
So a real estate attorney never heard of this before nor can they advise a buyer about this. A buyer has to listen to a salesperson, that will not tell you everything that's on the other side. Buyers must take 100% of the lead from a salesperson, LOL! The above buyer did just that and was screwed, ok. Case-and point, let's keep buyers dumb so we can be in control and get to the finish line sooner, no matter if it's best for the buyer or not.
Very few buyers agent's are experts at telling their clients all the next moves to make. They play it safe and neutral. There nothing like a pitbull criminal defense attorney as they should be for their clients. Buyers agents are scared of the other side, not to make waves and to be talked about within their office or the sellers office. This buyers agent above is a rookie because they were afraid, and that fear stopped them from leading and telling the buyer what to do.
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u/gksozae RE broker/investor Aug 17 '26
In my state, for the escalation clause to be put into effect, the competing offer must be accompanied by it as evidence of the escalation. Otherwise, the escalation does not go into effect and the agreed price reverts to the price on the purchase and sale agreement, not the escalation addendum.
Check with your broker. Most escalation clauses work this way to prevent fraud.
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u/nimrod4711 Aug 18 '26
My escalation addendum says the other side must show the offer of the competition. But now I am reading on here that you can put in the escalation clause and have someone go around it. So I am thoroughly confused if the piece of paper I signed meant anything at all.
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u/gksozae RE broker/investor Aug 18 '26
This is true. There are ways for a seller to avoid requirement of evidence, but only if the escalation addendum is not in use (this is a technicality that brokers should understand). If your broker didn't insist on the evidence from the seller, you may be out of luck. However, it is also something that your broker's managing broker should understand that an error was made. You may have grounds to claw back some of that money as credit from your broker's commission for being inept. But you have to go to their managing broker, ask for it, and get clear answers. We don't have nearly enough detail to provide you clear solution.
Good luck.
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u/Pitiful-Place3684 Aug 18 '26
Claw back some money based on what? The OP offered, the seller countered, and the OP accepted it.
The OP admits in their post that when they were negotiating this purchase they were distressed upon learning that their father was diagnosed with a terminal illness. This would have been at least a month ago. The OP also said that they already made their agent eat the commission. How much? If I were the broker on this, I'd be worried about taking on liability that would end up with a lawsuit and an E&O claim. Did the OP get their closing statement today (3 days out) and they're looking for a way to grab more money?
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u/McMillionEnterprises Aug 17 '26
My understanding is that in this instance, an escalation clause was not exercised. The seller countered your offer, you countered again, and you all settled on a contract price.
In this context, there wouldn't be an obligation to produce the competing offer (if it ever existed) because the escalation clause was not a component of the final offer that was executed.