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When writing an offer, it is important to understand how to structure your offer when competing with others and I am here to help!
Here are 3 important numbers to understand for an ESCALATION ADDENDUM.
1) Starting Price: I always advice my clients to start over asking price. Even if it’s just throwing the seller a little bone, it makes your offer stand out from the very first term of the contract.
2) Escalation Increment: This is amount you are willing to pay over another offer. The average buyer thinks in numbers that end with 5 or 0… so I always advise my clients to go with whatever their favorite number is between 3 and 4 or 6 and 8. Almost always that few thousand over the 0 or 5 is what WINS!
3) Your CAP. This is the price you aren’t willing to go above. Your offer will only go this high if another offer is within your escalation increment below yours… OR your other terms are so good the seller chooses to work with your offer even though it’s less than others!
This is all confusing, so it’s ok to not understand the first time. Keep asking questions and I’ll find a way to explain it that makes sense for you!
