I’m assuming that by “Acceleration Clause” you mean another buyer has submitted an offer with a clause that automatically increases that buyer’s offer by a certain amount above another buyer’s offer. For example, Buyer A submits an offer of $195,000 with an acceleration clause that increases Buyer A’s offer to $500 above a higher offer. Buyer B submits an offer of $200,000 so Buyer A’s offer is now adjusted upwards to $200,500. Often times there is a limit that the buyer will place with the acceleration clause.

Your question deals with how your buyer can compete more effectively without an acceleration clause against a buyer with an acceleration clause. You might consider the following:
– Try to find out what is most important to the seller. Price is obviously important but there may be other issues that are as important if not more important to the seller. Ask the listing agent “What is most important to your seller?” and see what he/she says. Then have your buyer’s offer satisfy as much of the seller’s desires as possible.
– Offer flexibility on the closing date if that is important to the seller.
– Make your buyer a sure bet to close (preapproved or already approved with the lender) and try to cast doubt on the other buyer’s ability to close on time.
– Raise the issue of the appraisal at an above market offer. If the home doesn’t appraise there will be more negotiations with the other buyer and perhaps a lower price. Or the deal might fall through.
– Try to present your buyer’s offer face-to-face with the seller and listing agent so you can make a positive, professional impression on the other side of the table. I have done this for my clients and emphasized that we are professionals and won’t let anything “fall through the cracks” to jeopardize the seller’s closing. If you are a full-time agent and the other agent is perhaps part-time, you should be able to raise issues in the seller’s mind about performance.
– Ask the listing agent the following question: “My buyer can only go to this price. What else could he/she do to make this work for your seller?”
– Focus on the other money issues in the transaction to make up the difference. For example, your buyer could purchase the home “as is” (still entitled to an inspection) thus eliminating any repair requests for the seller. The higher offer might come in with a list of repairs for the seller, thus making your buyer’s offer more competitive.
– Don’t ask for a lot of extras (e.g. decorating allowances, closing cost support, etc.).
– Have your buyer write a letter to the sellers and tell them why this home is important to the buyer. Many sellers really care about who buys their home.
– Try to find something that your buyer has in common with the seller. People like to deal with people who are like them or who they like.

Good luck!

Tom

We now have a RSS feed button on the right side of our Home Page (and other pages) on our website. Please visit our website again (www.thereni.com) and click on he RSS feed to sign up for our posts to be sent to you via email.

Tom

Our next MCNE courses in Phoenix are on March 7 (Advanced Negotiation Techniques for Listing Agents) and March 8 (Cultural Factors and Negotiating Across Generations).

I look forward to meeting you on February 21!

Tom

I’ve just signed up for the CNE course in Phoenix this month. In reading through your FAQs, I’m still unclear whether I will be able to put this designation on my business cards. Also, when is the next scheduled MCNE course in Arizona?

Thanks & I’m looking forward to meeting you on the 21st,

Ralph