Barb Schlinker The Real Estate Voice

Why Hedging an Offer in a Bidding War is a Bad IdeaQ.  What do you mean by Hedging an Offer?o   We cannot keep up with the inventory below $400,000o   Many agents who put in offers knowing they face a bidding war will use a tactic called an Escalation clause – §  I’ll pay $1000 over the highest offer up to X”§  The idea is that the strategy ‘saves’ the buyer money so they don’t have to pay the MAX price they are willing to pay.Q. Why these Hedge offers or you call Escalation Clauses are a bad ideao   Several reasons – let  me give an exampleo   It puts doubt into the seller’s mind that the buyer is willing to pay that priceo   Its contingent on the behavior of someone else’s offer – which the agents do not knowo   Often buyers will bid a peak price that is above what an appraiser would approve – causing potential contract failures when the appraisal comes in low.Q. We are here talking with Barb Schlinker of Your Home Sold Guaranteed Realty, you can reach Barb at 719 301 3900 or visit http://www.BarbHasTheBuye