- Matt Bauscher is one of Boise’s top real estate agents, and recently used a ‘no cap’ offer to win an in-demand home for his clients, at $125,000 over-ask.
- The ‘no cap’ offer is an escalation clause modified to outbid any other offers on the table.
- Bauscher said he’s done hundreds of escalation clauses before but never a ‘no cap’ deal: ‘No one had ever heard of what we did here either.’
- Leader of one of Idaho’s top real estate teams, Bauscher says he’s designed many escalation clauses before, but they all had caps on them.
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“No one had ever heard of what we did here either,” Matt Bauscher told Business Insider.
Bauscher, a top Boise real estate broker with Amherst Madison, was talking about his recent success winning a home for his clients with a “no cap” offer.
Bauscher has been in real estate since 2014, and leads one of the top real estate teams in Idaho, per Real Trends.
“It was the first time I’ve ever done it — I’ve done hundreds of escalation clauses, but most with a cap.”
Bauscher’s “no cap” offer came about as a result of the feverish Idaho real estate market, where realtors are describing a market overwhelmed with bidding wars and sales often going for $100,000 over ask. It’s a real estate “feeding frenzy,” as Bauscher puts it, as city dwellers flock to the Gem State.
While typical escalation clauses make a contractual provision in a home buyer’s offer letter that seeks to outbid competition by a designated amount, the “no cap” offer means a buyer is essentially writing a blank check for a home — determined to successfully outbid any other offers on the table.
“I often do an escalation clause on my offers when I’m representing a buyer,” Bauscher said. For example, “I will write in the contract, ‘Buyer agrees to beat any competing bona-fide offer by $5,000 over the highest competing offer. A copy of the competing offer must be provided for escalation clause to be valid.'”
Bauscher used the example of a house being listed at $1.5 million, for which you could do an escalation clause beating any offer by $10,000, up to a max of $1.7 million. The ‘no cap’ would mean you are going to beat any competing offer for just what it sounds like, he said — without a cap.
Bauscher said the “no cap” requires proof, too: The listing agent has to provide a lender approval letter or proof of funds of the competing offer, so they can’t falsify an offer.
It’s simple, but it works, according to Bauscher, who used the “no cap” offer to win his clients — who were coming from an affluent area out of state — a Boise home at $125,000 over ask.
“Many urban cities are losing people to Boise,” he said, pointing to the city’s safety, low cost of living, and seasonal weather, adding that residents can work from home and enjoy these amenities while still making the same big-city money.
“We were willing to go as high as it took for them to get that house.”