How to Go From Two (or More) Buyers to None
Multiple offers are such a fixture of the Twin Cities housing market these days that Buyers’ agents need to be on their “on their game” (and then some) if their clients are to have a shot of prevailing.
Meanwhile, listing agents (representing Sellers) are almost certain to encounter what is known as an “asterisk clause” — and must be adept at fielding same.
“Match and Raise”
Instead of filling in a purchase price on their offer, the Buyer employing an asterisk clause inserts this phrase (or the equivalent): ‘Buyer will pay $5,000 (or $10,000, or $200) over next highest offer.’
So, why do reputable agents (including yours truly) frown on such a tactic?
Because as often as not, it can backfire on the Seller, just as quickly leaving them with no offers.
That’s what can happen when one of the bidders greatly overshoots the other(s), and the Seller informs the “asterisk” Buyer that they just agreed to pay $5,000 more than that.
Rather than wildly overpay, such Buyers will typically find a way to walk — or renegotiate a much lower price after everyone else has.
Scenario #2: everyone comes in with an “asterisk” offer.
Which leaves you . . . nowhere.
Because of these (and other) perils, most experienced listing agents handling multiple offers set ground rules that preclude asterisk offers.
See also, “After You . . . No, After You . . . No, After You.”