The strength of $5 well played

I remember it well.  It was a cold night in March of 2004.  A friend of mine had asked to meet me in Westminster, Md. He owned a town home in Laurel and was thinking of putting it on the market.  I was driving out route 97 when my cell phone rang.  It was my friend calling.  He had thought about it and didn’t think it was a good time to sell.  I listened and told him that if he changed his mind or wanted more information, just give me a call.

I was just about in Westminster when his call came in, so I decided that I might as well stop and have dinner.  It was about a one hour drive back to the office.  I had just settled into my seat and was looking at the menu when I got another call.

“Hi John, this is Quisara. My husband and I have been looking for a home and we think we have found one.  Do you know anything about the Montrose Parkway?  Our agent told us not to worry, but there are signs all over the neighborhood saying “Stop the Montrose Parkway”.

“Sure I know about the Parkway and the plans. Eventually, Montrose Road will be a straight shot into Rockville. What’s the address of the property?  I’m eating now, but I will check it out and call you later tonight.”

Well, I finished my meal and drove to the office. I pulled up the address in the MLS. I punched the address into Google Maps ( it does not take a genius to put the pieces together).  Hmmmm, I double checked the information. I pulled up the listing for the property.  I double checked everything.  Then I made the call.

“Hello”

“Hi Quisara. I have some information for you.  I know it is late, but would you and your husband like to meet me out by the property?  I can be there is 15 minutes.”

She agreed.  We both drove to the street where the home was located.

I stood out in the middle of the street and told them, ” You see that small fence at the end of the back yard? Well, that is going to be replaced with a retaining wall.  The Montrose Parkway will be just beyond your backyard. It may be close enough that you could pave the yard and use the retaining wall to play handball.”

Quisara looked at me and said “Oh no. Oh no she didn’t. The agent told us it was nothing. She told us to write an offer tonight so we would get the home. I am going to call her right now. She is done. Will you represent us?”

“Sure, once you terminate you agreement with the other agent, I will be glad to work with you.”

FAST FORWARD TWO WEEKS

After some serious home searching, the Whitney’s decided on a home in Garrett Park Estates ( a quiet neighborhood situated between Kensington and Rockville).  The market was heating up and they were concerned about being caught up in a bidding war.  Offers had to be submitted by the following Tuesday at 4pm. The market was like that back then.

The home was listed at $449,000.  We anticipated that the final sales price would be close to $510,000. Apparently, there were two other parties interested in the home. All of us submitted offers.  The listing agent called and asked for our “best and final” offer.  Our original offer was $505,000.  It was time to sit with the Whitneys and go over a final offer.

This was where the rubber meets the road.  They allowed that they could go to $510,000. I explained that the offer would include an appraisal contingency ( this protects them and their bank. The loan will only be approved for a percentage of the appraised price).  I spoke with the listing agent.

This was the only time that I pulled the “escalation clause” out of the bag.  The Whitney’s “best and final” offer was $505,000 with an escalation clause to a maximum of $510,005. The escalation clause would allow their final offer to be $5 more than any other offer up to their maximum.

I submitted the offer and we waited. The other offers also had escalation clauses with $5,000 increments. The offers capped at $510,000.

The Whitney’s got the home. The $5 increment was just enough. Had they capped at $510,000, the listing agent would have had to call everyone in and request another best and final.  The Whitney’s best was the final.

One thought on “The strength of $5 well played

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