We’re often doing things behind the scenes to protect our clients’ best interests, whether those are financial or emotional (or usually, both). We want to share a behind-the-scenes look at a situation we recently handled for one of our clients, all without their knowledge.
One thing clients always want to know is whether or not a real estate agent can cheat when it comes to an escalator clause. (If you’re not familiar with this, here’s some background info: If you’re a buyer and you make an offer on a home that you believe will receive multiple offers, you will often have an escalator clause that will state how much you are willing to escalate your offer to in order to win, and at what increments. An agent needs to be able to prove that they have a real offer that is being used to escalate your offer in order for the price to escalate.)
Usually, things run like clockwork, and 98% of the time we are able to verify there’s a legit offer that’s escalating things. It’s mostly a trustworthy process, but sometimes, the agent acting strange on the other end. That’s when we start to ask questions.
In the particular situation that we want to share today, our buyers had put in an offer on a home and we received a call stating that we had won the home. (Yay!) We shared this with our happy and relieved clients. At this point, the listing agent said we needed to correct one small thing in the offer, which was just to cross out the list price and put in the new purchase price with the escalator amount. This is a common practice to make things extra clear on the first page, so whatever, it wasn’t abnormal).
But then about 15 minutes later as we were working on this edit, we received another call from the listing agent. He said he had called all of the other offers that were competing with ours and let them know that they had lost. And of course, the runner-up said they were going to fix their offer and raise the escalating amount, and we were to standby. (Keep in mind, our clients have already heard that they’ve won the home!)
The listing agent called us back again, and said that a new offer changed the escalation amount, and it was time for us to change our escalation amount if we still wanted the home to be ours.
Well, we were ready to use our leverage. We told the listing agent that should we revoke our offer, then their seller won’t even end up with our lower offer (let alone the higher, competing offer we were just being told about). We had to remind the agent that hey, either you sign the offer as it was, or you won’t have anything. It worked, and our clients got the home for the price they were originally told… without having to suffer the ups and downs of the all of the behind-the-scenes drama we (happily!) protected them from. (Matt also may have been over an hour late to his own birthday party—sorry friends!—but this is how important it is to take care of these things ASAP!)
The second time this scenario happened, we had the same conversation with the listing agent. We asked what he would do if we revoked our offer, and he said he didn’t know. He was trying to get another offer on the other side, and we anticipated this. We already had a copy of the competing offer (which is part of the rules), and we called them to tell them what was happening. It turns out that the agent was lying to the other side, and we told them that if their offer reaches a certain amount, they’re being lied to.
We are always working to protect our clients, and in this case, we were looking to protect the other clients, too. Why, might you ask?
A few bad apples in the real estate biz can really ruin things for everyone else. If people lose faith in the offer process, then escalators will disappear. Not only did we want to protect our client from this behavior, but we want to protect Seattle’s market and the reputation of real estate agents in general.
Our end goal was getting the house for our client, but also just fighting people who get too greedy. 98% of the time, things go smoothly. It’s also important for real estate agents to think about their relationships with other agents, and what type of reputation they’ve creating for themselves. If you want your clients to win, you need to treat other agents with respect. We truly believe that if you always do the right thing, the right thing will come back around!