What an Escalation Clause Can Do for You

What an Escalation Clause Can Do for You


Here’s how escalation clauses help homebuyers in our market.

An escalation clause is a popular tool being used right now to help buyers get their offers accepted. What is an escalation clause?

In a multiple-offer environment, it’s sometimes hard to know how to price your offer. You might be willing to go higher than the next buyer, but you don’t even know where to start. Thus, buyers oftentimes make their best guess as to where they think other offers might be. An escalation clause allows you to increase your offer to beat the next highest offer.

“You’ll have to carefully weigh whether this is the right option for you based on the situation.”

Escalation clauses should be used judiciously because there obviously may be a price you simply can’t afford. You’ll have to carefully weigh whether this is the right option for you based on the situation. Sometimes, you can put a cap on your escalation clause that states you’re willing to pay x amount of dollars higher than the next highest offer up to a certain point. If you don’t put a cap on your escalation clause and the price goes too high, you can always withdraw your offer as well.

If you have questions about how to utilize this tool or know someone who could benefit from it, give me a call. I’d love to speak with you.

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