Escalation clauses are back.
With the hot real estate market, multiple offers are becoming more common and with that escalation clauses.
How does the escalation clause work?
Here is an example:
The sellers list their three-bedroom house for $250,000. It is priced well and receives several offers. The seller has 3 options: accept , reject or counter the offer.
Buyer No. 1 adds an “Escalation Clause” form to their offer. The form is used by buyers interested in raising their bid in a potential bidding war.
Buyer No.1 offers $250,000, and adds in the escalation form that they are prepared to increase their offer by $1,000 over any other offer, up to a maximum of $260,000. Buyer No.2’s offer is $255,000.
If the seller — based on the escalation clause — accepts the higher price from Couple No. 1 The offer will the become $256,000.
This is a pretty simple explanation. If you’d like any more info. please give me a call at 360-739-6981 or send me an email: email@example.com