Escalation clauses are a buyer’s best friend.
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Competition is fierce among buyers in today’s real estate market, so many people want to know ways they can make their offers stand out. One of the simplest but most effective ways to ensure you win is to include an escalation clause.
This is an addendum that is attached to the offer, and it includes three parts: the purchase price, the amount of escalation, and the maximum price. So, a buyer may offer to buy a home at $500,000 and include an escalation clause of $5,000. If other offers come in, the buyer will pay $5,000 more than the next highest offer.
"One of the simplest but most effective ways to ensure you win is to include an escalation clause."
For example, if someone else offers $525,000 for the home, the buyer’s offer will go up to $530,000. However, the buyer may include a max price of $550,000, which means they won’t escalate once an offer hits that price.
The catch here is that the seller will know the max amount you can spend, so they may make a counteroffer and ask for that maximum price. If you have any questions, call or text today at (239) 248-8000. I’d love to help you.
